Managerial Finance 476(II)

3. I have a project that will cost $150,000 to start (implementation costs) and there is no terminal cash flow. The operating cash flows over the next 5 years are as follows:

                 Revenue Operating Costs
Year 1 $25,000 $35,000
Year 2   55,000   30,000
Year 3            85,000         35,000
Year 4 100,000   40,000
Year 5 125,000   50,000
What is the payback period?