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Steinmann Inc

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Steinmann Inc. is considering the acquisition of a new machine that costs $410,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and

incremental net cash flows that would be produced by the machine are:

                          Incremental net                            Incremental net

                       operarting income                            cash flows

Year 1                $57,000                                         $139,000

Yaer 2                $57,000                                         $139,000

Yaer 3                $26,000                                          $108,000

Yaer 4                $25,000                                          $107,000

Year 5                $74,000                                          $156,000

The payback period of this investment is closest to:

A) 2.9 years

B) 3.2 years

C) 4.8 years

D) 5.0 years