The Serene Hotel Is Considering Investment in Some New Low

The Serene Hotel is considering investment in some new low maintenance kitchen equipment that will increase the range of meals that its restaurant can offer. Based on the following information, calculate the payback period.
Initial investment = $90,000
Investment life = 6 years
Increased revenues resulting from investment = $16,000 per year
Decreased costs resulting from investment = $4,000 per year
Salvage value associated with investment = $10,000 in year 6
Investment's required rate of return = 13%

A) 4.25 years
B) 3.75 years
C) 3.5 years
D) 4.0 years
E) 4.5 years