Soles, a shoe manufacturer, is evaluating the costs and benefits of new equipment that would custom fit each pair of athletic shoes. The customer would have his or her foot scanned by digital computer equipment; this information would be used to cut the raw materials to provide the customer a perfect fit. The new equipment costs $100,000 and is expected to generate an additional $35,000 in cash flows for five years. A bank will make a $100,000 loan to the company at a 10% interest rate for this equipment€™s purchase. Use the following table to determine the break-even time for this equipment.

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Present Value oflat 10% Present Value Of Cash Flows Cumulative Present Value of Cash Flows Year Cash Flows* 0 $(100,000) 35.000 35,000 35.000 35.000 35.000 0.9091 0.8264 0.7513 0.6830 0.6209