Year	No upgrade	Upgrade
1	$-100,000	$-100,000
2	-100,000	-120,000
3	-120,000	-60,000
4	-130,000	-90,000
5	-120,000	-70,000
6	-110,000	-70,000
7	-130,000	-100,000

X Company is considering an upgrade to its computer equipment that will cost $190,000 but result in smaller operating costs. Estimated annual operating costs are as follows (above).

If X Company decides to replace the equipment, what is the payback period (in years)?

A: 2

B: 3

C: 4

D: 5

E: 6

F: 7