You are the project manager and are considering recommending a project that costs $280,000; expected inflows are $10,000 per quarter for the first two years and then $25,000 per quarter thereafter. What is the payback period?

A.
48 months

B.
40 months

C.
36 months

D.
50 months

Explanation:
Year 1 and 2 inflows are each $40,000 for a total of $80,000. Year 3 inflows are an additional $100,000. Add one more quarter to this total, and the $280,000 is reached in 4 years, or 48 months.