Question: Jack is considering adding toys to his general store. He estimates that the cost of inventory will be $3,200. The remodeling and shelving costs are

Jack is considering adding toys to his general store. He estimates that the cost of inventory will be $3,200. 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 2.02 years.

b. no; because the payback period is 3.80 years.

c.no; because the payback period is 3.23 years.

d.yes; because the payback period is 2.94 years.

e.no; because the payback period is 2.02 years.

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