A company is planning to purchase a machine that will cost $34,200, have a six-year life, and be depreciated over a three-year period 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. What is the payback period for this machine?

Sales		$141,000
Cost:
Manufacturing	$53,700
Depreciation on machine	5,700
Selling and administrative expenses	47,000	(106,400)
Income before taxes		$34,600
Income tax (30%)		(10,380)
Net income		$24,220

1.14 years.

6.00 years.

3.86 year.

1.41 years.

2.82 years.