Assume that you are thinking about starting your own small business. You have made the following estimates regarding this opportunity:

1. You can rent a location for your business at a cost of $36,000 per year.
2. The equipment costs incurred to start the business would total $250,000. The equipment would have a 5 -year useful life and a salvage value of $25,000.
3. Your company's estimated sales per year would equal $350,000 and its variable cost of goods sold would be 30% of sales.
4. Other operating costs would include $59,000 per year in salaries, $4,000 per year for insurance, $25,000 per year for utilities, and a 3% sales commission.

The payback period for this investment opportunity is closest to:

a: 4.17

b: 2.26

c: 3.86

d: 3.17