• James Construction Co. is considering a new inventory system that will cost $950,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $350,000 in year two, $150,000 in year three, and $250,000 in year four. The required rate of return is 8%. What is the payback period of this project?

A) 4.00 years

B) 3.56 years

C) 3.40 years

D) 3.31 years

C is the correct answer, please show how you arrive at that answer