Exercise 11-4 Payback period; accelerated depreciation LO P1 A machine can be purchased for $280,000 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 2 $40,000 Year 4 $45,000 Year 1 $13,000 Year 3 $66,000 Year 5 $135,000 Net income Compute the machine's payback period (ignore taxes). (Round payback period answer to 3 decimal places.) Computation of Annual Depreciation Expense Annual Depr. (40% Beginning Year Book Value Accumulated Depreciation at Year-End Ending Book Value of Book Value 280,000 40 4 Annual Cash Flows Cumulative Cash Flow $ (280,000) Year Net income Depreciation Net Cash Flow 0 (280,000) 13,000 40,000 66,000 45,000 135,000 40 66,000 45,000 135,000 66,000 111,000 246,000 4 Payback period- years