Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $20,000 and will have a 6-year useful life and a $5,900 salvage value. Delivering prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $33,900 per year. The cost of these prescriptions to the pharmacy will be about $28,800 per year. The pharmacy depreciates all assets using the straight-line method. The payback period for the auto is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.)

Multiple Choice

• 3.9 years

• 2.8 years

• 5.1 years

• 5.6 years