Cowell Corporation is considering an investment in new equipment costing

$160,000.

The equipment will be depreciated on a

straightline

basis over a

fiveyear

life and is expected to generate net cash inflows of

$40,000

the first year,

$35,000

the second year, and

$82,000

every year thereafter until the fifth year. What is the payback period for this investment? The equipment has no residual value.

A.

3.04

years

B.

4.04

years

C.

3.25

years

D.

2.51

years