Valley Hospital Is Considering the Purchase of New Medical Equipment

Valley Hospital is considering the purchase of new medical equipment for $25,000. The old equipment has zero salvage value. The costs associated with operating the equipment are: $\begin{array}{lrr} & \underline{\text { Old Equipment}}& \underline{\text { New Equipment}}\\& \$ 9,000 & \$ 4,500 \\\text { Mabour } & 2,000 & 1,200 \\\text { Miscellaneous } & 1,500 & 1,300 \\\text { Amortization } & 8,000 & 4,750\end{array}$
If the new machine is purchased and ignoring income taxes, the payback period is:

A) 3.57 years
B) 2.13 years
C) 2.86 years
D) 4.55 years