Baxset, Inc. is considering the purchase of a piece of equipment that costs $26,000. Projected net annual cash flows over the projects life are:

Year Project Net Cash Flow

1 $3,000

2 $8,000

3 $15,000

4 $9,000

The projects payback period is:

a. 2.63 years

b. 2.80 years

c. 2.37 years

d. 2.20 years

e. 3.00 years