A machine can be purchased for $150,000 and used for five years, yielding the following income. This income computation includes annual depreciation expense of $30,000. Income Year Initial invest Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 $10,000 $ Year 2 $25,000 Compute the machine's payback period. Note: Round payback period answer to 2 decimal places. Net Income Depreciation 10,000 25,000 50,000 37,500 100,000 Year 3 $50,000 Net Cash Flow $ Year 4 $37,500 Payback period = (150,000) $ Year 5 $100,000 Cumulative Cash Flow (150,000)

A machine can be purchased for $150,000 and used for five years, yelding the following income. This income computation includes annual depreciation expense of $30,000 Compute the machine's payback period Note: Round payback period answer to 2 decimal places