TB MC Qu. 12-59 (Algo) Payback period for the new machine: Build Corporation Build Corporation wants to purchase a new machine for $290,000. Management predicts that the machine can produce sales of $198.000 each year for the next 5 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $88.000 per year. The firm uses straight-line depreciation with no residual value for all depreciable assets Build's combined Income tax rate is 30% Management requires a minimum after-tax rate of return of 14% on all Investments. What is the payback period for the new machine (rounded to nearest one-tenth of a year? (Assume that the cast inflows occur evenly throughout the year) Muitiple Choice 2.5 years 27 years 3.1 years 3.6 years 42 years