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 $117,000. The equipment will have an initial cost of $234,000 and have a 3 year life. If the salvage value of the equipment is estimated to be $92,000, what is the payback period? Ignore income taxes.

a) 1.21 years

b)2.00 years

c)2.79 years

d)5.00 years