Let's solve the problem step by step: **Step 1: Identify the information given and what is being asked.** - Cost of machine = $78,000 - Annual operating cost savings = $20,000 - We are to find the payback period (in years), **rounded to 1 decimal place**. *Explanation:* The payback period is the time it takes for the savings from the investment to cover the initial cost. --- **Step 2: Calculate the payback period.** - Payback period = Cost of Machine / Annual Savings - Payback period = $78,000 / $20,000 = 3.9 years *Explanation:* This means it will take 3.9 years for the company to recover its investment through cost savings. --- **Final Answer:** **3.9 years**