Question: A machine can be purchased for $200,000 and used for five years, generating the following net income. When projecting net income, straight-line depreciation is applied,

A machine can be purchased for $200,000 and used for five years, generating the following net income. When projecting net income, straight-line depreciation is applied, using a useful life of five years and a residual value of zero.

Year 1

year 2

year 3

year 4

year 5

Net Income

13,500

33,500

83,000

50,500

134.000

Calculate the payback period for the machine (ignore taxes).

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