CPFM Cheat Sheet 2026

The 30 highest-yield CPFM facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. What does a positive net present value (NPV) on a project indicate? → The project adds value and should be accepted
2. An earn-out provision in an M&A deal is BEST described as: → A contingent payment tied to the target's future performance
3. A bond's coupon rate is 5% and the market yield is 7%. The bond will most likely trade at a: → Discount
4. During a health inspection of a food establishment, the following individuals are in charge of oversight: → The person in charge
5. An efficient portfolio on the efficient frontier offers: → The highest expected return for a given level of risk
6. Which of the following would most likely raise a firm's cost of debt? → A downgrade in its credit rating
7. The Economic Order Quantity (EOQ) model minimizes the sum of which two costs? → Ordering cost and carrying cost
8. Which technique eliminates the need for a company to convert one currency to another when settling intercompany transactions? → Netting
9. The minimum amount that must be maintained in a futures margin account is the: → Maintenance margin
10. Which financing decision affects a firm's long-term capital structure? → Issuing long-term debt versus equity
11. Which of the following best describes the role of an external auditor in corporate governance? → Providing an independent opinion on whether financial statements are fairly presented
12. In M&A valuation, a precedent transactions analysis establishes value by examining: → Multiples paid in similar historical M&A deals
13. Which ratio best measures the proportion of a company's capital that comes from creditors? → Debt-to-total-capital ratio
14. A fiduciary duty in financial management requires that an officer or director act in the best interest of whom? → The shareholders and the organization they serve
15. The Hart-Scott-Rodino (HSR) Act requires pre-merger notification to the government when a transaction exceeds certain thresholds in order to: → Allow antitrust review before the deal closes
16. Which of the following governance structures is most effective at reducing the risk of financial fraud at a publicly traded company? → A majority of independent directors with a separate audit committee
17. The primary purpose of an Investment Policy Statement (IPS) is to: → Document objectives, constraints, and guidelines
18. Which source of capital generally carries the lowest cost for a profitable firm due to tax deductibility? → Debt
19. A firm with volatile cash flows is setting a dividend policy as part of strategic planning. The most prudent approach is to: → Adopt a conservative, sustainable payout
20. A company holds receivables denominated in euros while reporting in U.S. dollars. What type of risk does this exposure primarily represent? → Transaction (foreign exchange) risk
21. The Capital Asset Pricing Model (CAPM) estimates the cost of equity as: → Risk-free rate + beta × equity risk premium
22. Which of the following is an example of a plain vanilla derivative? → Standard interest rate swap
23. An annuity differs from a perpetuity in that an annuity: → Has a finite number of payments
24. Credit risk is best defined as the risk that: → A counterparty fails to meet its contractual obligations
25. Which of the following is a leading indicator of future financial performance? → Customer satisfaction scores
26. Inflation that is higher than expected generally benefits: → Borrowers with fixed-rate debt
27. A sunk cost is best described as a cost that: → Has already been incurred and cannot be changed
28. Strategic financial planning should align with which overarching organizational element? → The corporate vision and mission
29. A dividend policy that pays a constant percentage of earnings each year is called a: → Constant payout ratio policy
30. Following a power outage lasting more than four hours in an establishment, the following must be discarded: → Excessive animal products