2

Hayden Company is considering the acquisition of a machine that costs $392,000. The machine is expected to have a useful life of six years, a negligible residual value, an annual net cash flow of $88,000, and annual operating income of $74,800. What is the estimated cash payback period for the machine (round to one decimal points)?

a.4.5 years

b.5.2 years

c.6.4 years

d.1.2 years