Avalon Inc. is considering investing in new equipment.. The initial cost of the machinery is $184,000. Avalon expects the machinery to have a 10year useful life, with a $14,000 salvage value. Annual depreciation expense is computed as $17,000. Net annual aftertax cash inflows are $28,000. Assume that the cash inflows occur evenly throughout the year. Compute the payback period in years for the potential investment.

a. 3.8 years

b. 4.1 years

c. 6.1 years

d. 6.6 years