Your company is considering the acquisition of a machine with an initial investment of $56,000, that will generate the following after-tax cash flows:

year 1 $28,000

year 2 $25,000

year 3 $21,000

If the company tax rate is 20% and the cost of capital is 12%, What is the payback period?

Select one:

2.35 years

2.41 years

1.85 years

2.20 years

1.81 years

2.14 years