Company Z purchases an asset for $12,000. As a result of the investment, the company expects the following after-tax cash flows:

Year 1 $2,000

Year 2 $2,000

Year 3 $4,000

Year 4 $6,000

Year 5 $6,000

What is the payback period of this investment?

3.67 years

3 years

3.4 years

3.2 years