AP® practice test

Free AP® Business with Personal Finance Practice Test (2026)

This is a set of 25 original practice questions that follow the official AP® Business with Personal Finance units and their multiple-choice weights, each with a short explanation. Only basic arithmetic is needed, so a four-function calculator is enough.

  • 25 questions
  • 4 topics from the official outline
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The practice test

25 questions

Question 1 of 25A small manufacturer reports these figures for the year: revenue $500,000; cost of goods sold $300,000; operating expenses $120,000; interest expense $20,000; taxes $15,000. What is its operating profit margin?
Question 2 of 25A ski-rental shop in a mountain town finds that warmer winters are shortening its snow season by several weeks each year. In a PESTEL analysis, this is best classified as which kind of factor?
Question 3 of 25A cosmetics store hands out free sample-size jars of a new moisturizer, and many people who take one later come back to buy the full-size product. Which of Cialdini's principles of persuasion is the store mainly using?
Question 4 of 25A bakery is doing a SWOT analysis. (1) Its head baker has won several regional baking awards. (2) The city is building a new highway exit that will bring more drivers past the shop. How should these two items be classified?
Question 5 of 25A candle maker has fixed costs of $6,000 per month. Each candle sells for $25 and has a variable cost of $10. How many candles must it sell each month to break even?
Question 6 of 25A new internet provider enters a town charging $20 a month, which is below its cost per customer, and plans to raise the price once it has won many customers away from established rivals. Which pricing strategy is this?
Question 7 of 25Last year a gym earned $500,000 of the $2,000,000 spent on gym memberships in its town. This year it earned $550,000, while total spending in the town grew to $2,500,000. Which statement is correct?
Question 8 of 25Maya is saving for a used car she plans to buy in exactly two years. She already has a separate emergency fund and will not need this money before then. Which federally insured account best fits her goal if she wants the highest typical interest rate?
Question 9 of 25A sales representative is paid a base salary of $1,200 a month plus a 6% commission on her sales. If she sells $45,000 of products in a month, what is her total pay for that month?
Question 10 of 25A juice startup wants to estimate how many adults in its city would buy a new sugar-free juice. It surveys 200 people as they leave a fitness center. What is the main weakness of this research?
Question 11 of 25Jordan can borrow $8,000 to buy a car either through an auto loan secured by the car or through an unsecured personal loan. Why does the secured auto loan usually carry the lower interest rate?
Question 12 of 25Two friends are starting a landscaping business. They want to share control of decisions and profits, and they want their personal savings and homes to be protected from the business's ordinary debts. Which form of business organization best fits these goals?
Question 13 of 25A taxi company in a large city notices that more people are riding rented electric scooters and bicycles for short trips instead of taking taxis. In Porter's Five Forces, this is an example of which force?
Question 14 of 25Leo buys one share of stock for $40. Over the next year he receives $2 in dividends, and at the end of the year he sells the share for $44. What is his annual rate of return?
Question 15 of 25An outdoor-gear brand aims its advertising at people who value adventure, spend weekends hiking and camping, and care about protecting nature. These customers are being grouped mainly by which kind of characteristics?
Question 16 of 25A hotel company plans to close one of its hotels. Which of the following is an internal stakeholder in this decision?
Question 17 of 25A small business's balance sheet shows: cash $8,000; accounts receivable $5,000; inventory $12,000; equipment $40,000; accounts payable $9,000; a loan due in six months $6,000; and a long-term bank loan $30,000. What is its working capital?
Question 18 of 25A print shop is choosing between two investments for one year. Option A costs $20,000 and is expected to add $5,000 in profit. Option B costs $50,000 and is expected to add $10,000 in profit. If the shop decides using return on investment (ROI), which should it choose?
Question 19 of 25A furniture maker decides to sell only through its own website and its own showrooms instead of through department stores. What is the main advantage of this kind of channel?
Question 20 of 25Ana keeps $5,000 in a savings account that pays 2% interest a year. Over the same year, prices rise by 4%. What happens to the purchasing power of her savings over that year?
Question 21 of 25A company holds patents on its key technology and runs huge factories that let it sell at very low prices. New firms find it very hard to compete in its market. Patents and large-scale low-cost production are both examples of
Question 22 of 25Last quarter an online tutoring company's customer acquisition cost was $40. This quarter it spent $15,000 on marketing, advertising and sales and gained 300 new customers. What does this KPI show?
Question 23 of 25A catering company reported a positive net profit for the year, yet it struggled to pay its employees on time because many clients had not yet paid their invoices. Which action would most directly improve its cash position in the short term?
Question 24 of 25A product's sales volume is rising at an increasing rate, production is being expanded and competitors are starting to launch similar products. The business is shifting its marketing toward making its product stand out from the new rivals. Which stage of the product life cycle is the product in?
Question 25 of 25Before building a full meal-kit service, a founder sets up a one-page website that describes the meal kits and lets visitors place preorders, so she can see whether people will actually pay. The simple website is best described as

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