Frantzen, Inc., is considering purchasing a new grinding machine with a useful life of 5 years. The initial outlay for the machine is $175,000, with an additional $25,000 in essential customization, as well as $10,000 in freight and installation costs. The required rate of return for Frantzen is 12.50%. The expected cash flows are as follows:

Year After-Tax Expected Cash Flow

1. $30,000

2. $40,000

3. $60,000

4. $80,000

5. $60,000

6. $50,000

Calculate the simple payback period.

A) 3.4 years

B) 4.3 years

C) 3.7 years

D) 4.0 years