A company is considering the purchase of a new machine for $128,700. Management predicts that the machine can produce sales of $26,500 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $22,000 per year, including depreciation of $7,200 per year. What is the payback period for the new machine?

Multiple Choice

14.10 years.

8.10 years.

9.60 years.

22.10 years.

11.00 years.