Purvell Corporation has just acquired a new machine with the following characteristics (Ignore income taxes.):

Cost of the equipment	$	50,000
Annual cash savings	$	15,000
Life of the machine		8	years

The company uses straight-line depreciation and a $5,000 salvage value. Assume cash flows occur uniformly throughout a year except for the initial investment and the salvage at the end of the project.

The payback period is closest to:

Multiple Choice

3.33 years

2.9 years

8.0 years

3.0 years