Nelson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $119,000. The equipment will have an initial cost of $714,000 and have a 7 year life. If the salvage value of the equipment is estimated to be $94,000, what is the payback period? Ignore income taxes.

5.21 years

6.79 years

6.00 years

9.00 years