Ratt, Inc. plans to buy a machine for $65,000 that has an estimated salvage value of $7,000, and an estimated life of 4 years. Ratts required rate of return is 11%. The machine is expected to generate the following operating cash flows and income over the next 4 years:

		Year 1		Year 2		Year 3		Year 4
Operating cash flows		$21,800		$26,400		$28,000		$24,600
Operating income		$7,300		$11,900		$13,500		$10,100

How much is the machine's payback period?

A. 2.58 years.

B. 2.60 years.

C. 2.35 years.

D. More than 4 years.