which multiple choice answer is correct? Assume that a company buys a new machine for $$220,000$ that has a useful life of five years and a $$20,000$ salvage value. The new machine will replace an old machine that can be sold for a salvage value of $$10,000.$ The machine will generate incremental contribution margin of $$75,000$ per year. The only fixed expense associated with the new machine is its annual depreciation of $$40,000$ per year. What is the payback period for this investment?

Multiple Choice

a$.2\mathrm{.}8$ years

b$.9\mathrm{.}8$ years

c$.2\mathrm{.}167$ years

d$.8\mathrm{.}8$ years