3.

A machine can be purchased for $250,000 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		$	17,000			$	42,000			$	119,000			$	63,500			$	168,000

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

Year	Net Income	Depreciation	Net Cash Flow	Cumulative Cash Flow
0			(250,000)	$(250,000)
1	$17,000
2	42,000
3	119,000
4	63,500			0
5	168,000			0
Payback period =