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CIPS L6M5 Exam - Topic 1 Question 30 Discussion

Which of the following statements about investment appraisal techniques are true? (Select all that apply.)Answer Options:
B) Return on Capital Employed (ROCE) is expressed as a percentage of the value of assets used to generate profit and C) Payback analysis ignores cash flow after the business recovers its costs and D) Internal Rate of Return (IRR) can be used with Net Present Value (NPV)
A) Non-discounted cash flow methods focus on profit maximization

CIPS L6M5 Exam - Topic 1 Question 30 Discussion

Actual exam question for CIPS's L6M5 exam
Question #: 30
Topic #: 1
[All L6M5 Questions]

Which of the following statements about investment appraisal techniques are true? (Select all that apply.)

Answer Options:

Show Suggested Answer Hide Answer
Suggested Answer: B, C, D

Option B is correct -- ROCE is expressed as a percentage (p.87).

Option C is correct -- Payback Analysis only considers the break-even point (p.83).

Option D is correct -- IRR and NPV are often used together (p.82).

Option A is incorrect -- Profit maximization is not the primary focus of non-discounted cash flow methods. [P.82-87]


by Santos at Sep 26, 2026, 06:39 AM

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Eliz
1 day ago
I feel confident that C is true since payback analysis does ignore cash flows after costs are recovered.
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Willis
6 days ago
I remember ROCE being a percentage, but I’m not sure if it’s specifically about assets used for profit.
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Aleisha
11 days ago
I think A is tricky because non-discounted methods might not always focus solely on profit maximization, right?
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