Permutation P(n,r) or ^nPr = n!/(n-r)! counts arrangements of r objects from n distinct objects where order matters. Formula: ^nPr = n × (n-1) × (n-2) × ... × (n-r+1). Example: P(5,3) = 5!/(5-3)! = 5!/2! = 60. Special case: P(n,n) = n! (arranging all). Applications: Seating arrangements, word formations, rank assignments. Restrictions: Circular arrangements = (n-1)!; With identical objects = n!/n₁!n₂!...; Clockwise vs counterclockwise = (n-1)!/2. Solving MCQs: Identify objects and positions; use appropriate formula. Shortcut: Write as products (5 × 4 × 3 = 60) instead of calculating factorials. Exam tip: Distinguish permutation (order matters) from combination (order doesn't).