Assume the following information for a capital budgeting proposal with a five-year time horizon:

Initial investment:
Cost of equipment (zero salvage value)	$ 560,000
Annual revenues and costs:
Sales revenues	$ 300,000
Variable expenses	$ 130,000
Depreciation expense	$ 50,000
Fixed out-of-pocket costs	$ 40,000

The payback period for this investment is closest to:

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Multiple Choice

• 3.29 years.
• 7.00 years.
• 4.31 years.
• 1.98 years.