Jack Is Considering Adding Toys to His General Store

question 65

Multiple Choice

Jack is considering adding toys to his general store.He estimates that the cost of inventory will be £4,200.The remodeling expenses and shelving costs are estimated at £1,500.Toy sales are
Expected to produce net cash inflows of £1,200, £1,500, £1,600, and £1,750 over the next four years,
Respectively.Should Jack add toys to his store if he assigns a three-year payback period to this
Project?

• A)yes; because the payback period is 2.94 years.
• B)yes; because the payback period is 2.02 years.
• C)yes; because the payback period is 3.80 years.
• D)no; because the payback period is 2.02 years.
• E)no; because the payback period is 3.80 years.

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Definitions:

Empirical Approach

A method of inquiry that relies on direct observation, experimentation, and evidence-based understanding to gain knowledge and facts.

Observation

The act of closely monitoring or examining something or someone to gain information or understanding.

Experimentation

The methodical testing of theories or hypotheses by manipulating variables to observe their effects.

Scientific Attitude

A mindset characterized by curiosity, skepticism, and openness to evidence and reasoning, rather than by belief or intuition.