This question is already on Chegg but it's disliked so I'm assuming it's incorrect. They put the payback period as 5, and the venture as "reject" but I don't think that's the correct answer.

Bonnie has the opportunity to purchase a large Victorian home for $650,000. She will need to spend additional $125,000 to renovate and convert to a bed and breakfast. She estimates the following after tax cashflows. Year 6 cashflow includes the terminal value of the venture.

a. The Payback period of the venture is years (round to the nearest year).

b. If Bonnie desired payback period is less than 3 years, Bonnie will (accept/reject) the venture

Year	Cash-flows
1	80,000
2	90,000
3	105,000
4	112,000
5	126,000
6	1,050,000