The LMN Corporation is considering an investment that will cost $78,000 and have a useful life of 4 years. During the first 2 years, the net incremental after-tax cash flows are $25,000 per year and for the last two years they are $20,000 per year. What is the payback period for this investment?

a. 3.2 years.

b. 3.5 years.

c. 4.0 years.

d. There is not enough information provided to correctly answer this question.

e. None of the answers listed above are correct.