A company is planning to purchase a machine that will cost $26,532, have a six-year life, and will have 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. What is the payback period for this machine?

Sales		$ 99,000
Costs:
Manufacturing	$ 59,400
Depreciation on machine	4,400
Selling and administrative expenses	33,000	(96,800)
Income		$ 2,200

Multiple Choice

6.03 years.

1.01 year.

12.06 years.

4.02 years.

24.12 years.