Burgers R Us purchased a new fryer for $45,000 to replace its old fryer. The new fryer has a 5 year life and an expected salvage value of $6,000. The old fryer will be sold immediately for its salvage value of $10,000. Annual cost savings from the new fryer are expected to be $12,000 per year.

The payback period of the new machine is closest to:

Multiple Choice

• 3.8 years

• 2.9 years

• 2.0 years

• 4.0 years