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

Initial investment: Cost of equipment (zero salvage value)$ 570,000Annual revenues and costs: Sales revenues$ 300,000Variable expenses$ 130,000Depreciation expense$ 50,000Fixed out-of-pocket costs$ 40,000

The payback period for this investment is closest to:

Multiple Choice

3.35 years.

7.13 years.

4.38 years.

2.05 years.