A company is considering a project with the following cash flows. The project has an initial investment of $35,500 and a salvage value of $5,000 at the end of five years. Year 1: $6,000 Year 2: $8,000 Year 3: $12,000 Year 4: $8,000 Year 5: $10,000 Joel Barnett, a new analyst hired by the company, is reviewing the following four approaches suggested by his colleagues to calculate the payback period for the project. Which approach should Barnett use?

a. Compute the average cash flow for the five years and divide the initial investment adjusted by the salvage value by the average cash flow. In this case, the payback period would be 3.47 years. B. Compute the cumulative cash flows after subtracting the salvage value from the initial investment. In this case, the payback period would be 3.56 years. C. Compute cumulative cash flows to determine the payback period. In this case, the payback period would be 4.15 years. D. Compute the average cash flow for the five years and divide the initial investment by the average cash flow. In this case, the payback period would be 4.03 years.