A machine can be purchased for $261,000 and used for five years, yielding the following...
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Accounting
A machine can be purchased for $261,000 and used for five years, yielding the following net incomes. In projecting net incomes, double-declining depreciation is applied using a five-year life and a zero salvage value. Net income Year 1 $15,500 Year 2 $28,000 Year 3 $69,000 Year 4 $48,000 Year 5 $130,000 Compute the machine's payback period (ignore taxes). (Round payback period answer to 3 decimal places.) Computation of Annual Depreciation Expense Annual Depr. (40% Accumulated of Book Value) Depreciation at Year-End Beginning Book Value Year Ending Book Value 1 2 3 4 Annual Cash Flows Year Net income Depreciation Net Cash Flow Cumulative Cash Flow $ (261,000) 0 1 2 $ (261,000) 15,500 28,000 69,000 48,000 130,000 3 4 5 Payback period = 1 years
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