Roger Is Considering Adding Toys to His General Store

question 60

Multiple Choice

Roger is considering adding toys to his general store. He estimates that the cost of inventory will be $6,400. The remodeling expenses and shelving costs are estimated at $2,100. Toy sales are expected to produce net cash inflows of $1,400, $2,300, $3,100, and $2,000 over the next four years, respectively. Should Roger add toys to his store if he assigns a three-year payback period to this project? Why or why not?

• A) No; The payback period is 3.55 years.
• B) No; The payback period is 3.85 years.
• C) Yes; The payback period is 2.55 years.
• D) Yes; The payback period is 2.87 years.
• E) Yes; The payback period is 3.13 years.

---

Definitions:

Bronchodilators

Medications that relax the muscles around the airways and open up the breathing passages, used to treat respiratory conditions like asthma and chronic obstructive pulmonary disease (COPD).

Pulmonary Airflow

The movement of air into and out of the lungs through the respiratory tract.

Mucus

A sticky, slippery secretion produced by glands and membranes within the body, serving to moisten, lubricate, and protect.

Respiratory Distress Syndrome

A serious condition where the lungs cannot provide enough oxygen to the body's vital organs, often seen in premature infants.