Brandon Company Is Contemplating the Purchase of a New Piece

Brandon Company is contemplating the purchase of a new piece of equipment for $45,000.Brandon is in the 30% income tax bracket.Predicted annual after-tax cash inflows from this investment are $18,000,$15,000,$9,000,$6,000 and $3,000 for years 1 through 5 respectively.The firm uses straight-line depreciation with no residual value at the end of five years.The hurdle rate for accepting new capital investment projects is 4%,after-tax.(Note: PV factors for 4%: for 1 year = 0.962,for year 2 = 0.925,for year 3 = 0.889,for year 4 = 0.855,for year 5 = 0.822;the PV annuity factor for 4%,5 years = 4.452. )
At a discount rate of 4%,the PV payback period,in years (rounded to two decimal places) is:

A) 2.89 years.
B) 3.50 years.
C) 3.89 years.
D) 4.27 years.
E) More than 5 years.