Principles of Finance practice by topic

• valuation — 124 free questions
• financial-statements-markets-wc — 94 free questions
• cost-of-capital-structure — 92 free questions
• time-value-of-money — 87 free questions
• capital-budgeting — 67 free questions
• risk-return-portfolio — 67 free questions

How do I learn the principles of finance?

Start with time value of money until discounting is reflexive, then build to NPV/IRR, WACC, and capital structure. KomFi Finance Prep teaches by repetition: 2,336 practice questions with full workings, video lectures, flashcards, and a glossary — drilled in 10-question reps.

What are the core principles of finance?

Money has time value; risk demands return; diversification is the only free lunch; markets price information; incentives drive behavior. Every interview answer and exam question is a costume on one of these five.

How do I prepare for a finance fundamentals interview?

Be fast and exact on TVM, WACC, NPV vs IRR, and the three statements. Drill until the mechanics are automatic so interview pressure lands on judgment, not arithmetic.

Where can I find free finance prep?

KomFi publishes free Finance Prep practice here. Basic includes 50 questions every 2 weeks with explanations; Pro unlocks the full bank, flashcards, and unlimited reps.

Free Principles of Finance practice questions

1. According to the Net Present Value criterion, which project should be chosen?
2. Calculate the 'Profitability Index' for a project with an initial cost of 200,000 and a present value of futur
3. If the required rate of return is 10%, what is the Net Present Value (NPV)?
4. Which type of 'real option' is being exercised when a pharmaceutical company decides to build a full-scale man
5. What is the project's Profitability Index (PI) at a 10% discount rate?
6. If the cost of capital is 10%, what is the Net Present Value (NPV) of the project?
7. A firm has FCFF of $100M, interest expense of $20M, a tax rate of 25%, and net new borrowing of $10M. Calculat
8. What is the Profitability Index (PI) and what does it indicate for capital rationing?
9. What is the Payback Period of the project?
10. If the cost of capital is 10%, what is the project's Profitability Index (PI)?
11. If the cost of capital is 10%, how do the Internal Rate of Return (IRR) and the Modified Internal Rate of Retu
12. If the cost of capital is 10%, what is the project's Net Present Value (NPV)?
13. An investor executes a 'bull call spread' by buying a 50-str… — What is the maximum possible profit for this s
14. If the WACC is 10%, what is the NPV of the project, accounting for the depreciation tax shield?
15. In the context of capital budgeting, if two projects are mutually exclusive and have different lives, which me
16. If the exit multiple is also 10x, what is the investor's IRR?
17. Calculate the Enterprise Value (EV) for a company with the following data: Market Capitalization of $1,500M, T
18. What is the Multiple of Invested Capital (MOIC)?
19. The primary mechanism through which the sponsor expects to generate a high internal rate of return (IRR), even
20. According to standard financial theory, which project should be accepted?
21. Which of the following signals would most likely lead to a 'low' score (indicating potential financial manipul
22. If the cost of capital is 10%, what is the Modified Internal Rate of Return (MIRR)?
23. What is the sponsor's IRR?
24. If the discount rate is 10%, which project is preferred using the Equivalent Annual Annuity (EAA) method?
25. What is the approximate annualized Internal Rate of Return (IRR) for the sponsor?