Sherman Equipment Manufacturing has identified a cost reduction project, which will save labor costs to the extent of $1,500,000 a year but will add yearly depreciation of $267,857. The fixed costs will increase by $250,000 per year. There will be no effect on revenues and the new equipment will have a salvage value equal to twenty-five percent of the acquisition cost. The useful life of this project is estimated to be seven years. What is the payback period for this project if the initial investment required is $2,500,000? O 2.78 years O 2.17 years O 1.67 years 2 years