Nestor Company Is Considering the Purchase of an Asset for $100,000

Multiple Choice

Nestor Company is considering the purchase of an asset for $100,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year. Compute the
break-even time (BET) period for this investment.
$\begin{array}{rrr}&\text {Annual Net }&\text {Present Value}\\&\text {Cash Flows}&\text { of \( \$ 1 \) at \( 10 \% \) }\\\text { Year 0 } & & 1.0000\\\text { Year 1 } & \$ 40,000 &.9091 \\\text { Year 2 } & \$ 40,000 & .826 \\\text { Year 3 } & \$ 35,000 &.7513 \\\text { Year 4 } & \$ 35,000 &.6830 \\\text { Year 5 } & \$ 30,000 & .6209\end{array}$

A) 2.98 years.
B) 3.18 years.
C) 3.62 years.
D) 2.85 years.
E) 2.57 years.