ACCA FM — Financial Management

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FM — Financial Management

Applied Skills • Free revision material, sample MCQs and mini mock.

What to Focus On

investment appraisal, working capital, business finance, valuation and risk management.

2026/27 preparationFree MCQsMini mockTest-session support

5 Free FM MCQs

Attempt each question before opening the answer.

1. A project with a positive NPV should normally:
A. Increase shareholder wealthB. Always be rejectedC. Reduce value by definitionD. Have zero cash flows
Show answer

Increase shareholder wealth — Positive NPV indicates value creation at the required return.

2. Which cost is normally used to discount project cash flows?
A. Relevant cost of capitalB. Historical book valueC. Gross profit marginD. Tax rate alone
Show answer

Relevant cost of capital — Discounting should reflect the required return for project risk.

3. A shorter receivables collection period generally:
A. Improves working capital cash conversionB. Always reduces salesC. Eliminates bad debtsD. Raises inventory
Show answer

Improves working capital cash conversion — Faster collections release cash sooner.

4. Gearing mainly reflects the relationship between:
A. Debt and equity financingB. Revenue and expensesC. Inventory and salesD. Cash and receivables
Show answer

Debt and equity financing — Gearing measures the degree of debt financing.

5. A forward contract can be used to manage:
A. Foreign exchange riskB. Inventory obsolescence onlyC. Audit riskD. Employment law risk
Show answer

Foreign exchange risk — Forwards can lock an exchange rate for a future transaction.

Free 5-Question Mini Mock

Try these without opening the answers first. Use them as a quick revision check.

1. A forward contract can be used to manage:
Check answer

Foreign exchange risk — Forwards can lock an exchange rate for a future transaction.

2. Gearing mainly reflects the relationship between:
Check answer

Debt and equity financing — Gearing measures the degree of debt financing.

3. A shorter receivables collection period generally:
Check answer

Improves working capital cash conversion — Faster collections release cash sooner.

4. Which cost is normally used to discount project cash flows?
Check answer

Relevant cost of capital — Discounting should reflect the required return for project risk.

5. A project with a positive NPV should normally:
Check answer

Increase shareholder wealth — Positive NPV indicates value creation at the required return.

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