A company is considering the purchase of a new machine for $62,000. Management predicts that the machine can produce sales of $17,400 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $6,600 per year including depreciation of $5,400 per year. Income tax expense is $4,320 per year based on a tax rate of 40%. What is the payback period for the new machine?

3.56 years.

6.60 years.

5.22 years.

11.48 years.

39.74 years.