Assigns three-year payback period to project

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Reference no: EM131932254

Selena is considering adding toys to her gift shop. She estimates the cost of new inventory will be $18,000 and remodeling expenses will be $2,000. Toy sales are expected to produce net cash inflows of $5,200, $5,800, $6,200, and $7,000 over the next four years, respectively. Should Selena add toys to her store if she assigns a three-year payback period to this project? Why or why not?

Reference no: EM131932254

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