100+ Free FPAC Part II Practice Questions

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Question 1

Score: 0/0

A flexible budget for performance evaluation adjusts:

Budgeted fixed costs to actual revenue

Budgeted depreciation to a market valuation

Actual costs to budgeted activity levels

Budgeted variable costs to actual activity levels

to track

2026 Statistics

Key Facts: FPAC Part II Exam

Exam Items

AFP FPAC test specifications

4.5 hours

Total Test Time

AFP FPAC Exam Quick-Look

500

Scaled Passing Score

AFP FPAC FAQs

$1,025

Member Early Fee

AFP 2026 deadlines page

40-50%

Largest Domain (Analysis and Projections)

FPAC test specifications

2x/year

Testing Windows

Aug 1-Sep 30, 2026 and Feb 1-Mar 31, 2027

FPAC Part II is a 4.5-hour Pearson VUE exam with 55 task-based simulations and scenario items. The passing score is 500 on AFP's scaled-score system. Testing windows for the 2026-2027 cycle are August 1 - September 30, 2026 and February 1 - March 31, 2027. The combined Part I + Part II application fee is $1,025 for AFP members (early) and $1,420 for non-members. Analysis and Projections (40-50%) and Models and Analytics (35-40%) account for roughly 80% of the exam.

Sample FPAC Part II Practice Questions

Try these sample questions to test your FPAC Part II exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1An FP&A analyst is building a rolling forecast for a SaaS business. Which structure best fits a driver-based revenue model?

A.Beginning ARR + new bookings − churn − downgrades + expansion = ending ARR

B.Prior-year revenue × (1 + historical CAGR)

C.Cost of goods sold ÷ gross-margin assumption

D.Marketing spend × industry conversion benchmark

Explanation: Driver-based SaaS forecasts roll ARR forward from operational drivers — beginning ARR plus new bookings, minus churn and downgrades, plus expansion. This lets each lever be flexed independently and ties forecast accuracy back to identifiable assumptions.

2A 13-period rolling forecast differs from a static annual budget primarily because it:

A.Always extends a constant horizon forward as each period closes

B.Eliminates the need for variance analysis

C.Replaces the GL as the source of actuals

D.Locks assumptions until the next fiscal year

Explanation: A rolling forecast maintains a constant forward horizon (e.g., 13 periods) by dropping the closed period and adding a new one. It supplements — not replaces — the annual budget and still requires variance analysis against budget and prior forecast.

3An FP&A team observes a $480K unfavorable revenue variance. Units sold were 4% higher than plan but the average selling price was 7% lower. The dominant driver of the variance is most likely:

A.Price

B.Volume

C.Mix

D.Efficiency

Explanation: Volume was favorable (+4%) while price was unfavorable (-7%). The negative price effect outweighed the positive volume effect, producing the net unfavorable revenue variance. Decomposing into price × volume isolates which lever moved the result.

4In variance analysis, the standard formula for price variance is:

A.(Actual price − Standard price) × Actual quantity

B.(Actual price − Standard price) × Standard quantity

C.(Actual quantity − Standard quantity) × Actual price

D.(Actual quantity − Standard quantity) × Standard price

Explanation: Price variance isolates the price effect by holding quantity at actual: (Actual price − Standard price) × Actual quantity. Volume variance, by contrast, isolates quantity at standard price: (Actual quantity − Standard quantity) × Standard price.

5A product mix variance is best described as the impact on profit from:

A.Selling a different proportion of products than planned

B.Selling more total units than planned

C.Selling at a different average price than planned

D.Using more labor hours per unit than planned

Explanation: Mix variance captures the profit impact of changing the share of higher- vs lower-margin products in total sales, holding total volume constant. Volume variance handles total units; price variance handles per-unit price; efficiency variance handles cost productivity.

6A project has an initial outlay of $1,000,000 and generates $300,000 per year for 5 years. The cost of capital is 10%. Using the annuity factor for 5 years at 10% of 3.7908, the NPV is approximately:

A.$137,000

B.$500,000

C.−$100,000

D.$1,137,000

Explanation: NPV = $300,000 × 3.7908 − $1,000,000 = $1,137,240 − $1,000,000 ≈ $137,000. Positive NPV indicates the project clears the 10% hurdle rate and creates economic value.

7Which statement about IRR is correct?

A.IRR is the discount rate that makes NPV equal to zero

B.IRR is always equal to the cost of capital at acceptance

C.IRR is unaffected by the magnitude of cash flows

D.IRR cannot be computed for projects with multiple negative cash flows

Explanation: IRR is defined as the discount rate that sets NPV to zero. A project is generally accepted when IRR exceeds the cost of capital (hurdle rate). IRR can have multiple roots when cash-flow signs change more than once, but it can still be computed.

8When ranking two mutually exclusive capital projects, why is NPV generally preferred over IRR?

A.NPV measures absolute dollar value added at the firm's cost of capital

B.IRR cannot be computed for long projects

C.NPV ignores the time value of money so it is simpler

D.IRR always assumes a discount rate of zero

Explanation: NPV measures absolute dollar value created at the firm's cost of capital, which aligns with shareholder-value maximization. IRR is a percentage and can rank projects incorrectly when they differ in scale or cash-flow timing because IRR implicitly reinvests at the IRR itself.

9Discounted payback period differs from simple payback because it:

A.Accumulates discounted cash flows instead of nominal cash flows

B.Excludes the initial investment from the calculation

C.Always equals the project's economic life

D.Is calculated after tax only

Explanation: Discounted payback uses the present value of each period's cash flow to determine when the cumulative discounted total recovers the initial investment. This addresses simple payback's main flaw of ignoring the time value of money.

10A company's WACC is 9%. A proposed project's IRR is 8.5% but its NPV at the firm's WACC is +$120,000. Which decision is most consistent with shareholder-value maximization?

A.The NPV calculation must be re-checked — IRR < WACC and positive NPV are inconsistent

B.Accept the project because NPV is positive

C.Reject the project because IRR is below WACC

D.Accept the project only if payback is under 3 years

Explanation: By definition, IRR is the discount rate that drives NPV to zero. If IRR < WACC, NPV at WACC must be negative. The two results cannot both be true, so the analyst must find the error before recommending action.

About the FPAC Part II Exam

FPAC Part II — Financial Analysis and Business Support — tests application of FP&A skills through 55 task-based simulations and scenario/case items. The three official domains are Analysis and Projections (40-50%), Models and Analytics (35-40%), and Business Communication (13-17%). Candidates must demonstrate ability to build driver-based projections, validate models, run variance and sensitivity analyses, evaluate capital investments, and communicate results effectively to business partners.

Questions

55 scored questions

Time Limit

4.5 hours (includes tutorial and admin)

Passing Score

500 scaled

Exam Fee

$1,025 member / $1,420 non-member (covers both parts, early-deadline) (Association for Financial Professionals (AFP))

FPAC Part II Exam Content Outline

40-50%

Analysis and Projections

Customer, deal, and product-level projections; rolling forecasts; driver-based models; variance analysis (price, volume, mix, efficiency); capital investment evaluation (NPV, IRR, payback, hurdle rates); sensitivity and scenario analysis; three-statement linkage

35-40%

Models and Analytics

Model design and validation; spreadsheet best practices; regression for forecasting; time-series basics (trend, seasonality, moving averages); Monte Carlo basics; KPI design; data integration from ERP/CRM/data-warehouse sources; reasonableness checks and error detection

13-17%

Business Communication

Audience-appropriate communication; executive dashboards and decks; storytelling with data; visualization principles (chart selection, pre-attentive attributes); supporting documentation; presentation Q&A handling

How to Pass the FPAC Part II Exam

What You Need to Know

Passing score: 500 scaled
Exam length: 55 questions
Time limit: 4.5 hours (includes tutorial and admin)
Exam fee: $1,025 member / $1,420 non-member (covers both parts, early-deadline)

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

FPAC Part II Study Tips from Top Performers

1Practice building driver-based revenue models from operational inputs (units × price, customers × ARPU) instead of growth-rate fudge factors — the exam rewards model logic, not curve fitting

2Memorize variance decomposition: total variance = price variance + volume variance + mix variance + efficiency variance; know which to flex on actuals vs budget

3Drill capital investment math under exam conditions — NPV with mid-year convention, IRR multiple-root pitfalls, payback vs discounted payback, and hurdle-rate logic

4Build comfort with regression diagnostics (R², residual plots, multicollinearity) and time-series basics (trend, seasonality, simple/weighted moving averages) — the exam tests interpretation, not derivation

5For Business Communication, practice the pyramid principle: lead with the answer, then supporting reasons, then data; this matches the executive-audience framing AFP emphasizes

Frequently Asked Questions

What is the format of FPAC Part II?

FPAC Part II — Financial Analysis and Business Support — is a 4.5-hour Pearson VUE computer-based exam with 55 task-based simulations and scenario/case items. The 4.5 hours include tutorial and admin time. AFP publishes the test specifications under the 2025B-2031A window range, and the 2026-2027 cycle runs August 1 - September 30, 2026 and February 1 - March 31, 2027.

What topics are tested on FPAC Part II?

Part II covers three official domains: Analysis and Projections (40-50%), Models and Analytics (35-40%), and Business Communication (13-17%). The first two domains together account for about 80% of the exam, so candidates spend most of their preparation on driver-based forecasting, variance analysis, capital investment evaluation, financial modeling, regression, and time-series basics.

What is the FPAC Part II passing score?

AFP uses a scaled-score system: candidates must score 500 to pass. Raw scores from the 55 items are converted to the scaled score through a statistical equating process, so the exact number of correct answers needed varies by form. AFP does not publish pass rates for the FPAC exam.

How much does the FPAC exam cost in 2026?

The 2026 AFP member early-deadline application fee is $1,025 and the non-member early-deadline fee is $1,420; the non-member fee includes one year of AFP membership. Final-deadline fees are $1,125 and $1,520 respectively. The new-applicant fee covers both Part I and Part II of the exam. Re-registration for a single part is $250.

Do I have to pass Part I before sitting Part II?

AFP does not require Part I to be passed before scheduling Part II — candidates may sit both parts within a single testing window. However, each part can be taken only once per window, and Part II builds heavily on the financial-acumen content from Part I, so most candidates prepare for and pass Part I first.

How long should I study for FPAC Part II?

Most working FP&A professionals plan 150 to 250 hours for FPAC Part II spread across 12 to 20 weeks. Because 80% of the exam is Analysis and Projections plus Models and Analytics, the bulk of study time should go to driver-based modeling, variance analysis, financial modeling techniques, regression, and time-series forecasting, with Business Communication reinforced through practice presentations.

Where is the FPAC exam delivered?

FPAC Part II is delivered at Pearson VUE test centers — over 5,000 locations worldwide. After AFP approves the application, candidates receive an Authorization to Test (ATT) and schedule directly with Pearson VUE at pearsonvue.com/AFP. Remote proctoring is not offered; both parts must be taken at a physical test center.