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(Ignore income taxes in this problem.) Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $27,000 and will have

(Ignore income taxes in this problem.) Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $27,000 and will have a 6-year useful life and a $5,600 salvage value. Delivering prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $33,600 per year. The cost of these prescriptions to the pharmacy will be about $28,200 per year. The pharmacy depreciates all assets using the straight-line method. The payback period for the auto is closest to:

4 years

5.2 years

6 years

5 years

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