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CXC CAPE · · Management of Business

Investment appraisal
Practice Questions

40 CXC CAPE Management of Business questions on Investment appraisal, each with instant feedback and a full examiner-style mark scheme.

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✨ Revision guide includes key terms, worked examples and exam technique for Investment appraisal.

Try 2 sample questions on Investment appraisal

Question 1 · 1 mark · Difficulty 1/3

Under the NPV decision rule, when should a project be accepted?

  1. When the NPV equals the discount rate
  2. When the NPV is negative but improving
  3. When the NPV is positive
  4. When the NPV is lower than the initial investment
Show answer & explanation
✓ Answer: CWhen the NPV is positive
Award 1 mark. A positive NPV means the project returns more than the discount rate demanded. Where projects compete for limited funds, the higher NPV is preferred.
Question 2 · 1 mark · Difficulty 1/3

What does the payback period measure?

  1. The average annual profit as a percentage of the investment
  2. The value today of future cash flows
  3. The total profit a project earns over its life
  4. The time taken for cumulative net cash flows to recover the initial outlay
Show answer & explanation
✓ Answer: DThe time taken for cumulative net cash flows to recover the initial outlay
Award 1 mark. It measures speed of recovery rather than profitability, and ignores everything happening after the payback point.
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20 questions · 25 min · free

CXC CAPE Management of Business: Investment appraisal FAQ

Is Kramizo free for CXC CAPE students preparing for Management of Business?
Yes — completely free. Every student gets 45 questions a day on the free plan, with no card required and no trial countdown. That free quota works across every subject and every topic in our bank, so you can mix Investment appraisal practice with other Management of Business topics or even switch to a totally different CXC CAPE subject without paying anything. Kramizo's optional Pro plan removes the daily cap and adds detailed progress analytics, but the free tier is the real product — used by thousands of GCSE, IGCSE and CSEC students.
Are the Investment appraisal questions aligned to the official CXC CAPE Management of Business syllabus?
Every question is written against the published CXC CAPE Management of Business specification, including the exact command words (state, describe, explain, calculate, evaluate, etc.), mark allocations, and difficulty tier you'd see on a real CXC CAPE paper. Explanations are written in the style of official examiner mark schemes — they tell you what is being awarded marks and why distractors are wrong, not just whether you got it right. The bank is continually refined to match the latest syllabus updates from CXC CAPE.
How is Investment appraisal typically tested on CXC CAPE Management of Business papers?
Investment appraisal appears across multiple question types on real CXC CAPE Management of Business papers — most commonly as multiple-choice questions in the objective section, structured short-answer questions in the main paper, and occasionally as part of an extended response. Kramizo's practice bank reflects that mix: 4-option MCQs, true/false statements, fill-in-the-blank key terms, multi-select questions, and ordering questions. Working through the bank gives you exposure to every question style examiners actually use.

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