Jack Is Considering Adding Work Jeans and T-Shirts to the Items

question 134

Multiple Choice

Jack is considering adding work jeans and T-shirts to the items he stocks in his general store provided that his payback period is less than 2.5 years. He estimates that the initial cost of
Inventory will be $6,750. The remodeling expenses required for this addition are $18,200. Jean and
T-shirt sales are expected to produce net cash inflows of $10,200, $14,500, and $16,600 over the
Next three years, respectively. Jack _____ add the jeans and T-shirts to his offerings as the payback
Period is _____ years.

• A) should; 1.67
• B) should; 2.02
• C) should; 3.67
• D) should not; 2.02
• E) should not; 3.67

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Definitions:

Heart Sound

The sounds produced by the closing of heart valves and the flow of blood through the heart, often assessed with a stethoscope.

Patellar Reflex

A reflex action of the leg resulting from a sharp tap on the patellar tendon, used to test the nervous system's response.

Reflex

An involuntary and nearly instantaneous movement in response to a stimulus.

Normal

Conforming to a standard; usual, typical, or expected state or condition.