A project requires an initial outlay of $100,000, and is expected to generate annual net cash inflows of $28,000 for the next 5 years. Determine the payback period for the project.

A) 0.28 years
B) 1.4 years
C) 3.57 years
D) 17.86 years

To calculate the payback period, we need to see how long it takes for the net cash inflows to pay back the initial investment ($100,000).

Year 1: $100,000 - $28,000 = $72,000 remaining
Year 2: $72,000 - $28,000 = $44,000 remaining
Year 3: $44,000 - $28,000 = $16,000 remaining
Year 4: $16,000 - $28,000 = -$12,000 (payback is in year 3)

Therefore, the payback period is 3 years and 1/12 of a year, or approximately 3.57 years. The best choice is C.