Investment Project:

• Initial cost: $80,000
• Cash inflows:
  • Year 1: $12,000
  • Year 2: $15,000
  • Year 3: $20,000
  • Year 4: $25,000
  • Year 5: $30,000

Year	Cash Flow	Cumulative Cash Flow
0	$(80,000)	$(80,000)
1	$12,000	$(68,000)
2	$15,000	$(53,000)
3	$20,000	$(33,000)
4	$25,000	$(8,000)
5	$30,000	$22,000

Requirements:

1. Determine the payback period.
2. Calculate the cumulative cash flow by year 3.
3. Identify the year when the investment breaks even.