A shoe manufacturer is evaluating new equipment that would custom fit athletic shoes. The new equipment costs $90,000 and will generate $35,000 in net cash flows for five years. Note: Negative cumulative cash flows should be indicated with a minus sign. Round break- even time answers to two decimal places. Determine the break-even time for this equipment. Year Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Net Cash Flow X $ (90,000) X 35,000 x 35,000 x 35,000 x 35,000 x 35,000 x Present Value of 1 at 10% = 1.0000 0.9091 = 0.8264 = 0.7513 = 0.6830 0.6209 = II II Present Value of Net Cash Flows $ Cumulative Present Value of Net Cash Flows (90,000) $ (90,000) 88

A shoe manufacturer is evaluating new equipment that would custom fit athletic shoes. The new equipment costs $90,000 and will generate $35,000 in net cash flows for five years. Note: Negative cumulative cash flows should be indicated with a minus sign. Round breakeven time answers to two decimal places. Determine the break-even time for this equipment