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A machine can be purchased for $150,000 and used for five years, yielding the following net incomes. In projecting net income, double-declining depreciation is applied,
A machine can be purchased for $150,000 and used for five years, yielding the following net incomes. In projecting net income, double-declining depreciation is applied, using a five-year life and a zero salvage value. Compute the machine's payback period (ignore taxes). Round the payback period to three decimals.
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Net Income | $10,000 | $25,000 | $50,000 | $37,500 | $100,00 |
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