Question: A machine can be purchased for $283,000 and used for five years, yielding the following net incomes. In projecting net incomes, double-declining depreciation is applied,
A machine can be purchased for $283,000 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.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||||||||||||||||
| Net income | $ | 21,000 | $ | 30,000 | $ | 73,000 | $ | 41,000 | $ | 122,000 | ||||||||||
Compute the machines payback period (ignore taxes). (Round payback period answer to 3 decimal places.)
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