Apex Corp., is planning to buy a production machine costing $200,000. This machine's expected useful life is five years, with no residual value. Apex uses a discount rate of 8% and has calculated the following data pertaining to the purchase and operation of this machine:

Year	Estimated Annual Net Cash Inflow
1	$100,000
2	$80,000
3	$10,000
4	$10,000
5	$10,000

(Ignore income taxes in this problem.)

What is the payback period for this investment?

a.

4.00 years.

b.

3.00 years.

c.

2.75 years.

d.

3.50 years.