Exercise 24-4 Payback period; accelerated depreciation LO P1 A machine can be purchased for $150,000 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 $10,000 $25,000 $50,000 $37,500 $100,000 Compute the machine's payback period (ignore taxes) (Round payback period to 3 decimal places.) Year Computation of Annual Depreciation Expense Beginning Annual Depr. Accumulated Book (40% of Depreciation Ending Book Value Value Book Value) at Year-End 1 2 3 4 5 Year Net Income Annual Cash Flows Net Cash Depreciation Flow Cumulative Cash Flow $ (150,000) 0 1 2 3 4 5 (150,000) 10,000 25,000 50,000 37,500 100,000 Payback period = years