Jarvey Company Is Studying a Project That Would Have a Ten-Year

Jarvey Company is studying a project that would have a ten-year life and would require a $450,000 investment in equipment that has no salvage value.The project would provide net income each year as follows for the life of the project: $\begin{array}{l}\begin{array}{l}\text { Sales } \\\text { Less cash variable expenses } \\\text { Contribution margin } \\\text { Less fixed expenses: }\\\text { Fixed cash expenses}\\\text { Depreciation expenses}\\\text { Net income}\\\end{array}\begin{array}{r}&\$ 500,000 \\&200,000\\&300,000\\\\\$ 150,000\\\underline{45,000}& \underline{195,000}\\&\$ 105,000\end{array}\end{array}$ The company's required rate of return is 12%.What is the payback period for this project? (Ignore income taxes in this problem.)

A) 2.00 years.
B) 3.00 years.
C) 4.28 years.
D) 9.00 years.