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CIPS L6M5 Exam - Topic 1 Question 8 Discussion

Actual exam question for CIPS's L6M5 exam
Question #: 8
Topic #: 1
[All L6M5 Questions]

Glitter Kitten Ltd CEO applies the Payback Analysis for expansion.

Investment: 50m

Annual returns: 10m

Q: What is the payback period?

Answer Options:

Show Suggested Answer Hide Answer
Suggested Answer: B

Payback period formula:

Investment (50m) Annual inflow (10m) = 5 years. [P.1.4]


by Laine at Mar 19, 2025, 10:37 PM

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Floyd
5 months ago
50 years? No way, that can't be right!
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Mozell
5 months ago
Wait, is it really 5 years? Seems off to me.
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Eura
5 months ago
Payback period is 5 years. Simple math!
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Christoper
6 months ago
Yup, 5 years sounds right!
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Kiera
6 months ago
Totally agree, 50m investment with 10m returns.
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Sarah
6 months ago
I keep second-guessing myself, but I think the payback period is more about how long it takes to break even. So, if the investment is 50 million and the returns are 10 million annually, I guess it must be 5 years?
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Dortha
6 months ago
I practiced a similar question last week, and I think the payback period was just a straightforward calculation. I hope I remember it correctly; I feel like it's definitely not 1 year or 50 years.
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An
7 months ago
I'm not entirely sure, but I remember something about the payback period being the time it takes to recover the initial investment. If that's the case, then 5 years seems like a reasonable answer.
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Kathrine
7 months ago
I think the payback period is calculated by dividing the investment by the annual returns, so it should be 50 million divided by 10 million. That sounds like 5 years, right?
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Dominic
7 months ago
Okay, I got this. The payback period is the number of years it takes to recoup the initial investment of 50m, given the annual returns of 10m. So the payback period is 50m / 10m = 5 years. Easy peasy!
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Zoila
7 months ago
Wait, I'm a bit confused. Is the payback period the number of years it takes to fully recover the initial investment? Or is it something else? I need to review the payback analysis formula to be sure.
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Edgar
7 months ago
This looks straightforward. The payback period is the time it takes to recover the initial investment, so it should be 50m / 10m = 5 years. I'm confident that's the right answer.
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Glory
8 months ago
Hmm, I'm not sure. Isn't the payback period the time it takes to recoup the initial investment? I think I need to do some more calculations to figure this out.
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Louisa
8 months ago
Okay, let's think this through step-by-step. The investment is 50m and the annual returns are 10m. To find the payback period, I just need to divide the investment by the annual returns, right?
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Elke
1 year ago
I think it's 1 year because the annual returns cover the investment in the first year.
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Terrilyn
1 year ago
I agree with Shalon, the payback period should be 10 years.
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Gail
1 year ago
Meow, meow, payback in 1 year? I call catnip on that one!
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Laurel
1 year ago
User 2
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Laura
1 year ago
User 1
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Pamella
1 year ago
1 year? That's faster than a cheetah on Red Bull. I'm not buying it.
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Tijuana
1 year ago
Well, 5 years seems more realistic for such a big investment.
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Zena
1 year ago
B) 5 years
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Kristian
1 year ago
1 year? That's faster than a cheetah on Red Bull. I'm not buying it.
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Ashleigh
1 year ago
A) 1 year
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Candra
1 year ago
50 years? Glitter Kitten CEO must be living in the future if they think that's a reasonable payback period.
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Shalon
1 year ago
I believe it's 10 years because the investment is 50m and the annual returns are 10m.
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Lawanda
1 year ago
Really? 10 years? I thought this was a simple calculation, not a Netflix series.
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Elvera
1 year ago
User 3: Maybe there are other factors at play that we're not considering.
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Marlon
1 year ago
User 2: Yeah, I agree. It's surprising that it would take that long.
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Detra
1 year ago
User 1: That does seem like a long payback period.
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Malinda
1 year ago
Payback period? Piece of cake! 5 years, easy peasy.
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Cordie
1 year ago
C) 10 years
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Thaddeus
1 year ago
B) 5 years
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Toshia
1 year ago
A) 1 year
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Bernadine
1 year ago
C) 10 years
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Cecilia
1 year ago
B) 5 years
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Apolonia
1 year ago
A) 1 year
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Dona
1 year ago
I think the payback period is 5 years.
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