A machine can be purchased for $283,000 and used for five years,yielding the following...

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Accounting

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 lifeand 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 machine’s payback period (ignore taxes). (Roundpayback period answer to 3 decimal places.)

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Solution Computation of Annual Depreciation Cost of Machine 283000 Useful Life 5 Years Salvage Life NIL Normal Rate of Depreciation 1 Useful Life X 100 1 5 X 100 20 Rate of Depreciation under DoubleDeclining Depreciation method 2 X Normal Rate of See Answer

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In: AccountingA machine can be purchased for $283,000 and used for five years,yielding the following net...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 lifeand a zero salvage value.Year 1Year 2Year 3Year 4Year 5Net income$21,000$30,000$73,000$41,000$122,000Compute the machine’s payback period (ignore taxes). (Roundpayback period answer to 3 decimal places.)

	Year 1			Year 2			Year 3			Year 4			Year 5
Net income		$	21,000		$	30,000		$	73,000		$	41,000		$	122,000