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A machine can be purchased for $160,000 and used for five years, yielding the following net...

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Accounting

A machine can be purchased for $160,000 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 azero salvage value.

Year 1

Year 2

Year 3

Year 4

Year 5

Net income

$

10,700

$

26,700

$

57,000

$

40,100

$

106,800


Compute the machine’s payback period (ignore taxes). (Roundyour intermediate calculations to 3 decimal places and roundpayback period answer to 3 decimal places.)

Year       NetIncome       Depreciation      Net CashFlow   Cumulative Cash Flow   

0                                             (160,000)            $(160,000)          

1             $10,700                                                                

2             26,700                                  

3             57,000                                  

4             40,100                                  

5             106,800                                                

Payback period=                             

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