CIPS Exam L6M5 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:

A1 year

B5 years

C10 years

D50 years

Show Suggested 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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Elke

5 months ago

I think it's 1 year because the annual returns cover the investment in the first year.

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Terrilyn

5 months ago

I agree with Shalon, the payback period should be 10 years.

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Gail

5 months ago

Meow, meow, payback in 1 year? I call catnip on that one!

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Laurel

4 months ago

User 2

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Laura

4 months ago

User 1

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Pamella

5 months ago

1 year? That's faster than a cheetah on Red Bull. I'm not buying it.

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Tijuana

3 months ago

Well, 5 years seems more realistic for such a big investment.

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Zena

4 months ago

B) 5 years

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Kristian

4 months ago

1 year? That's faster than a cheetah on Red Bull. I'm not buying it.

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Ashleigh

4 months ago

A) 1 year

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Candra

5 months 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

5 months ago

I believe it's 10 years because the investment is 50m and the annual returns are 10m.

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Lawanda

5 months ago

Really? 10 years? I thought this was a simple calculation, not a Netflix series.

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Elvera

4 months ago

User 3: Maybe there are other factors at play that we're not considering.

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Marlon

4 months ago

User 2: Yeah, I agree. It's surprising that it would take that long.

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Detra

4 months ago

User 1: That does seem like a long payback period.

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Malinda

5 months ago

Payback period? Piece of cake! 5 years, easy peasy.

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Cordie

4 months ago

C) 10 years

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Thaddeus

4 months ago

B) 5 years

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Toshia

4 months ago

A) 1 year

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Bernadine

5 months ago

C) 10 years

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Cecilia

5 months ago

B) 5 years

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Apolonia

5 months ago

A) 1 year

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Dona

5 months ago

I think the payback period is 5 years.

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