Albury Company Is Adding a New Assembly Line at a Cost

Albury Company is adding a new assembly line at a cost of $8.5 million. The company expects the project to generate cash flows of $2 million, $3 million, $4 million, and $5 million over the next four years. Its cost of capital is 16 percent. Payback: What is the payback period for this project?

A) 2.8 years
B) 2.9 years
C) 3.1 years
D) 3.4 years