Compute the payback period for an investment with the following net cash flows. (Round your answer to one decimal place.)

YearNet Cash Flows per YearCumulative Net Cash Flows

Initial investment($150,000)($150,000)

1$15,000($135,000)

2$25,000($110,000)

3$30,000($80,000)

4$35,000($45,000)

5$50,000$5,000

6$45,000$50,000

Requirements:

1.Calculate the exact year and fraction of the year when the initial investment is recovered.

2.Determine the payback period.

3.Verify the cumulative cash flow at the end of each year.

4.Identify any year in which the net cash flow significantly contributes to the recovery.