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

Limited Time Offer

25%

Off

Get Premium L6M5 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Elke

2 months ago

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

upvoted 0 times

...

Terrilyn

2 months ago

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

upvoted 0 times

...

Gail

2 months ago

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

upvoted 0 times

Laurel

1 months ago

User 2

upvoted 0 times

...

Laura

1 months ago

User 1

upvoted 0 times

...

Pamella

2 months ago

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

upvoted 0 times

Tijuana

1 months ago

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

upvoted 0 times

...

Zena

1 months ago

B) 5 years

upvoted 0 times

...

Kristian

1 months ago

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

upvoted 0 times

...

Ashleigh

1 months ago

A) 1 year

upvoted 0 times

...

Candra

2 months ago

50 years? Glitter Kitten CEO must be living in the future if they think that's a reasonable payback period.

upvoted 0 times

...

Shalon

3 months ago

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

upvoted 0 times

...

Lawanda

3 months ago

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

upvoted 0 times

Elvera

2 months ago

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

upvoted 0 times

...

Marlon

2 months ago

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

upvoted 0 times

...

Detra

2 months ago

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

upvoted 0 times

...

Malinda

3 months ago

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

upvoted 0 times

Cordie

1 months ago

C) 10 years

upvoted 0 times

...

Thaddeus

2 months ago

B) 5 years

upvoted 0 times

...

Toshia

2 months ago

A) 1 year

upvoted 0 times

...

Bernadine

2 months ago

C) 10 years

upvoted 0 times

...

Cecilia

2 months ago

B) 5 years

upvoted 0 times

...

Apolonia

3 months ago

A) 1 year

upvoted 0 times

...

Dona

3 months ago

I think the payback period is 5 years.

upvoted 0 times

...