A company is planning to purchase a machine that will cost $72,000, have a six-year life, and be depreciated using the straight-line method with no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below.

Sales		$138,000
Costs:
Manufacturing	$64,000
Depreciation on machine	12,000
Selling and administrative expenses	42,000	(118,000)
Income before taxes		$ 20,000
Income tax (50%)		( 10,000)
Net income		$ 10,000

What is the payback period for this machine?

	a.7.20 years
b.	14.40 years
c.	1.00 year
d.	3.60 years
e.	3.27 years