Nagle's Machinery Is Spending $97 500 to Update Its Equipment

Nagle's Machinery is spending $97 500 to update its equipment.This is necessary if the firm wishes to be competitive in the market place and provide a wide array of product models.The company estimates that these updates will improve their cash inflows by $18 500 a year for five years.What is the payback period?

A) 1.37 years
B) 2.84 years
C) 3.29 years
D) 5.49 years
E) this project never pays back