Sebastian is considering adding new items to his convenience store. He estimates that the cost of inventory
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Question:
Sebastian is considering adding new items to his convenience store. He estimates that the cost of inventory will be $2,400. The remodeling expenses and shelving costs are estimated at $2,900. New item sales are expected to produce net cash inflows of $1,450, $2,200, $3,130, and $2,020 over the next four years, respectively.
What is the pay back period for the project?
Should Sebastian add new items to his store if he assigns a three-year payback period to this project? Why or why not?
Please assume that CFs occur evenly throughout a year.
Related Book For
South Western Federal Taxation 2015
ISBN: 9781305310810
38th Edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young
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