A company reports the following data related to net cash flows. The payback period is 5.0 years.

Year // Net Cash Flows per Year // Cumulative Net Cash Flows

Initial investment $ (200,000) $ (200,000)

Year 1 Net 20,000. Cumulative (180,000)

Year 2 Net 40,000. Cumulative (140,000)

Year 3. Net 40,000. Cumulative (100,000)

Year 4 Net 60,000. Cumulative (40,000)

Year 5 Net 80,000 Cumulative 40,000

Year 6 Net 80,000 Cumulative 120,000

True or False ?