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A machine can be purchased for $140,000 and used for five years, yielding the following...

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Accounting

A machine can be purchased for $140,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line 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 $ 9,500 $ 23,500 $ 64,000 $ 35,500 $ 94,000

Compute the machines payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and round payback period answer to 3 decimal places.)

image

Net Cash Cumulative Cash Net Income Depreciation Year Flow Flow (140,000) (140,000) $ 9,500 1 23,500 64,000 4 35,500 94,000 Payback period =

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