A beverage company is investing in equipment at a cost of $39,000 for an entirely new production line to meet expected demand for a new product that has been proposed. They expect that this will increase annual sales by $79,000.
There are multiple annual variable costs that are also associated with the new line and equipment:
Cost of ingredients: $45,000
Salaries Expense: $13,200
Maintenance: $2,000
Annual Depreciation Expense: $4,900
What is the payback time in years for the proposed investment? Round to two decimal places.