Palmer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $124,000. The equipment will have an initial cost of $453,000 and have a 6 year life. If the salvage value of the equipment is estimated to be $84,000, what is the payback period?

answers:

2.44 years

3.65 years

4.40 years

6.00 years