Jack Is Considering Adding Toys to His General Store

question 204

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:

Hans Selye

A pioneering Hungarian-Canadian endocrinologist who is known for his research on the stress response and for introducing the concept of stress in medical research.

Stress Response

The body's reaction to a challenge or demand, characterized by physiological and psychological changes that prepare the body to act.

Alarm Phase

The initial stage of the body's response to stress, activating the sympathetic nervous system and the fight-or-flight response.

German-American

A person of German descent who is a citizen of the United States, often contributing to various aspects of American culture and society.