Assigns a three-year payback period to project

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Reference no: EM131297714

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 $1,300, $1,600, $1,700, 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 3.63 years

D. No; because the payback period is 2.02 years

E. No; because the payback period is 3.63 years

Reference no: EM131297714

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