Explanation

• PI measures investment profitability.
• PI = PV of future cash flows ÷ Initial investment.
• PI of 0.9 is less than 1.
• It generally indicates the investment is not acceptable

Explanation

• The normal balance of a liability account is a credit.
• Recorded on the credit (right) side
• Decrease (-): Recorded on the debit (left) side.
• Common Examples: Accounts payable, loans payable, and accrued expenses.

Explanation

• The natural (or normal) balance of a revenue account is a credit.
• Revenue increases with a credit.
• Revenue decreases with a debit.
• Revenue is reported on the income statement.

Explanation

• The 18th Amendment was passed in 2010.
• It strengthened provincial autonomy.
• It abolished the Concurrent Legislative List.
• Several powers were transferred to the provinces.

Explanation

• Public funds are generally spent by federal, Provincial, and Local Bodies governments.
• These public sector institutions manage budgets collected from taxes and public revenues to provide goods, services, and infrastructure for citizens.

Explanation

• Pakistan's civil service is shaped by its colonial legacy and heavy political interference/patronage.
• It was originally built on British India's centralized structures.
• Since the 1970s, political pressure has replaced merit in postings, promotions, and operations.

Explanation

• Opportunities and threats are primarily identified through External Environmental Analysis.
• External Analysis: Studies external factors such as the market, the economy, competitors, and industry trends.
• Opportunities: External factors that help a business grow.
• Threats: External factors that may harm the business.

(Note: Strengths and weaknesses are found through Internal Environmental Analysis*, which looks inside the company).

Explanation

• Public administration education and training in Pakistan have been primarily influenced by:
• the British colonial administrative framework
• the American public administration model
• Introduced during the 1950s and 1960s.

Explanation

Given:

• Dividend (D₀) = Rs. 4
• Market Price (P₀) = Rs. 100
• Growth rate (g) = 5%

Step 1: Calculate next year’s dividend

D₁ = D₀ × (1 + g)
= 4 × 1.05
= Rs. 4.20

Step 2: Use the Gordon Growth Model

Required Return:

Ke​=D1/P0​​​+g 

Ke​=4.20/100 ​+0.05

Ke​=0.042+0.05=0.092

Ke​=9.2%≈9%

Explanation

For an ordinary annuity:

PV=PMT×1−(1+r)−n/r​

PMT = Rs. 4,000

r = 8% = 0.08

n = 20 years

PV ≈ Rs. 39,727