O'Mally Department Stores Is Considering Two Possible Expansion Plans

question 191

Multiple Choice

O'Mally Department Stores is considering two possible expansion plans.One proposal involves opening 5 stores in Indiana at the cost of $1,920,000.Under the other proposal,the company would focus on Kentucky and open 6 stores at a cost of $2,500,000.The following information is available:

The payback period for the Kentucky proposal is closest to

• A)4.5 years.
• B)6.25 years.
• C)5.00 years.
• D)31.25 years.

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Definitions:

Production Control

The activity of planning, coordinating, and controlling the manufacture process from raw materials to finished product delivery.

Form Utility

The value added to goods through a change in form, shape, or appearance, to make them more useful or appealing.

Raw Materials

Basic substances in their natural, modified, or semi-processed states, used as inputs to a production process for manufacturing finished goods.

Quality Control

A process through which a business seeks to ensure that product quality is maintained or improved and manufacturing errors are reduced or eliminated.