Alicia Is Considering Adding Toys to Her Gift Shop

Multiple Choice

Alicia is considering adding toys to her gift shop.She estimates that the cost of inventory will be $7,500.The remodeling expenses and shelving costs are estimated at $1,800.Toy sales are expected to produce net cash inflows of $2,300,$2,900,$3,200,and $3,400 over the next four years,respectively.Should Alicia add toys to her store if she assigns a three-year payback period to this project? Why or why not?

A) No; The payback period is 2.93 years.
B) No; The payback period is 3.26 years.
C) Yes; The payback period is 2.93 years.
D) Yes; The payback period is 3.01 years.
E) Yes; The payback period is 3.26 years.