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Question
Alicia is considering adding toys to her gift shop. She estimates the cost of new inventory will be $9,500 and remodeling expenses will be $850. Toy sales are expected to produce net cash inflows of $1,300, $4,900, $4,400, and $4,100 over the next four years, respectively. Should Alicia add toys to her store if she assigns a 3-year payback period to this project? Why or why not?
A) No; The payback period is 3.94 years.
B) No; The payback period is 2.94 years.
C) Yes; The payback period is 3.94 years.
D) Yes; The payback period is 3.09 years.
E) Yes; The payback period is 2.94 years.
Answer
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Related questions
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C) limited partnerships.
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B) growth rate of the firm.
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Q:
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B) has an unlimited partnership life.
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D) limits each partner's personal liability to 25 percent of the partnership's total debt.
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Which one of the following statements concerning a sole proprietorship is correct?
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B) The profits of a sole proprietorship are subject to double taxation.
C) The owner of a sole proprietorship is personally responsible for all of the company's debts.
D) There are very few sole proprietorships remaining in the U.S. today.
E) A sole proprietorship is structured the same as a limited liability company.
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Which one of the following questions is least likely to be addressed by financial managers?
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B) Should customers be given 30 or 45 days to pay for their credit purchases?
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Q:
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A) how many shares of stock to issue.
B) whether or not to purchase a new machine for the production line.
C) how to refinance a debt issue that is maturing.
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The date on which a shareholder is officially listed as the recipient of stock rights is called the:
A) issue date.
B) offer date.
C) declaration date.
D) holder-of-record date.
E) ex-rights date.