Hazard Company is considering the acquisition of a machine that costs $375,000. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual cash flow of $150,000, and annual operating income of $87,500. What is the estimated cash payback period for the machine?

a.

3 years

b.

2.5 years

c.

4.3 years

d.

5 years