A project requires an initial investment of $120,000 and is expected to produce the following net cash flows:

• Year 1: $25,000
• Year 2: $35,000
• Year 3: $45,000
• Year 4: $55,000
• Year 5: $65,000
• Year 6: $75,000

Requirements:

1. Compute the cumulative cash flows each year.
2. Determine the payback period.
3. Calculate the project's NPV at a 7% discount rate.
4. Compute the IRR of the project.
5. Evaluate the PI.