Flexsteel Industries manufactures furniture for the retail, contract, and recreational vehicle furniture markets. The company is considering the purchase of a new piece of equipment, which would have an initial cost of $1,00O0,000 and a 5-year life. There is no salvage value for the equipment. The increase in cash flow each year of the equipment's life would be as follows:

Year 1 $ 376,000

Year. 2 $351,000

Year 3 $ 286,000

Year 4 $ 231,000

Year 5 $ 186,000

What is the payback period?

A)3.50 years

B)2.38 years

C)2.95 years

D)2.99 years