Jack Is Considering Adding Toys to His General Store

question 7

Multiple Choice

Jack is considering adding toys to his general store.He estimates that the cost of inventory will be $4,200.The remodeling 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:

Epithelial

Pertaining to epithelium, a layer of cells covering the body surfaces, cavities, organs, and blood vessels.

Muscle

Tissues in the body composed of fibers that contract to produce movement or maintain the position of parts of the body.

Nerve

A bundle of fibers that transmits electrical impulses between the brain and other parts of the body, essential for sensation and movement.

Metabolism

The set of life-sustaining chemical reactions in organisms for energy generation and molecular synthesis.