Leo Is Considering Adding a Deli to His General Store

question 63

Multiple Choice

Leo is considering adding a deli to his general store.The remodeling expenses and shelving costs are estimated at $2,500.Deli sales are expected to produce net cash inflows of $1,300,$1,600,$1,700,and $1,750 for Years 1 to 4,respectively.Leo has a firm 3-year payback requirement.Should he add the deli?

• A)Yes;because the payback period is 1.75 years
• B)Yes;because the payback period is 2.25 years
• C)Yes;because the payback period is 1.90 years
• D)No;because the payback period is 1.75 years
• E)No;because the payback period is 2.25 years

---

Definitions:

James II

King of England, Scotland, and Ireland from 1685 to 1688, whose reign ended with the Glorious Revolution due to his Catholic faith.

New England

A region in the northeastern United States comprising six states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.

James II

was the King of England, Ireland, and Scotland from 1685 to 1688, whose reign ended with the Glorious Revolution due to his attempts to reinstitute Catholic dominance in England.

William and Mary

The joint sovereigns of England, Scotland, and Ireland from 1689 to 1702, whose accession, known as the Glorious Revolution, marked the transition towards parliamentary democracy.