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, $4,400, 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?

Yes; The payback period is 3.95 years.

No; The payback period is 2.95 years.

No; The payback period is 3.95 years.

Yes; The payback period is 1.95 years.

Yes; The payback period is 2.95 years.