A company wishes to buy new equipment for $$14,000.$ The equipment is expected to generate an additional $$4,400$ in cash inflows for six years. All cash flows occur at year$-$end. A bank will make a $$25,000$ loan to the company at a $12\%$ interest rate so that the company can purchase the equipment. Use the table below to determine break$-$even time for this equipment:

Year Present Value of $1$ at $12\%$

$01\mathrm{.}0000$

$10\mathrm{.}8929$

$20\mathrm{.}7972$

$30\mathrm{.}7118$

$40\mathrm{.}6355$

$50\mathrm{.}5674$

$60\mathrm{.}5066$

Multiple Choice

Break$-$even time is between two and three years.

Break$-$even time is between three and four years.

Break$-$even time is between four and five years.

Break$-$even time is between five and six years.

This project will never break$-$even.