A company is considering investing in a project that would require a $$4$ million capital

expenditure immediately, and last for $8$ years. The machinery would be depreciated straight$-$line

$($i$.$e$.,$ with equal amounts each year$)$ to a book value of $$0$ by the end of the project. The project

would generate after$-$tax net$-$income of $$800,000$ each year, and the company will fund the

project, in part, by issuing $$2$ million in debt, which will pay interest at a rate of $7\%($with no

repayments of principal$)$ for all eight years of the project. There are no additional capital

expenditures or net working capital investments in years $1-8.$ What is the payback period of this

project?

A$.2\mathrm{.}78$ years

B$.3\mathrm{.}08$ years

C$.3\mathrm{.}45$ years

D$.4\mathrm{.}26$ years

E$.5\mathrm{.}00$ years