Jack Is Considering Adding Toys to His General Store

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.