(Ignore income taxes in this problem.) Pro-Mate, Inc. is a producer of athletic equipment. The company is considering the purchase of a machine to produce baseball bats. The machine will cost $60,000 and have a 10-year useful life. The following annual revenues and expenses are projected: Sales $40,000 Less expenses: Out-of-pocket production costs $15,000 Selling expenses 9,000 Depreciation 6,000 30,000 Net operating income $10,000 The machine will have no salvage value. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the new machine is about: 6.0 years 1.5 years 5.4 years 3.75 years

Sales		$40,000
Less expenses:
Out-of-pocket production costs	$15,000
Selling expenses	9,000
Depreciation	6,000	30,000
Net operating income		$10,000

The machine will have no salvage value. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the new machine is about:

		6.0 years
		1.5 years
		5.4 years
		3.75 years

Please provide me with the payback period (in years) for the new machine. My options are the 4 choices above.