Bev Is Considering Purchasing a New Button Holer for Her

Multiple Choice

Bev is considering purchasing a new button holer for her business. She estimates the machine will cost $90,000 and will be paid for in cash. Her cash savings from the first 4 years of operation of the machine will be $20,000 in year 1, $30,000 in year 2, $35,000 in year 3 and $35,000 in year 4. The payback period for the machine is:

A) 4 years.
B) 3.86 years.
C) 3.14 years.
D) 2.66 years.