Helicopter Gear is planning to expand its product line, which requires investment of $474,000 in special-purpose machinery. The machinery has a useful life of six years and no salvage value. The estimated annual results of offering the new products are as follows:

Revenue$527,000

Expenses (Including straight-line depreciation)(500,800)

Increase in net income$26,200

All revenue from the new products and all expenses (except depreciation) will be received or paid in cash in the same period as recognized for accounting purposes.rev: 08_09_2012

The payback period for this proposed investment is:

• 4.5 years.
• 9.0 years.
• 6.0 years.
• 2.3 years.