Fast Food, Inc $\$ 16,000$ And Has an Estimated Life of Ten Years

Fast Food, Inc. has purchased a new donut maker. It cost $\$ 16,000$ and has an estimated life of ten years. The following annual donut sales and expenses are projected:
$\begin{array}{l|r|r|}\hline \text { Sales } & & \$ 22,000 \\\hline \text { Expenses: } & & \\\hline \text { Flour, etc. (required in making donuts) } & \$ 10,000 & \\\hline \text { Salaries } & \$ 6,000 & \\\hline \text { Depreciation } & \$ 1,600 & \$ 17,600 \\\hline \text { Operating Income } & & \$ 4,400 \\\hline\end{array}$
(Ignore income taxes in this problem.)
-The payback period on the new machine is closest to which of the following?

A) 1.4 years.
B) 2.7 years.
C) 3.6 years.
D) 5.0 years.