Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A machine can be purchased for $231,000 and used for five years, yielding the following net incomes. In projecting net incomes, double-declining depreciation is applied

image text in transcribed
A machine can be purchased for $231,000 and used for five years, yielding the following net incomes. In projecting net incomes, double-declining depreciation is applied using a five-year life and a zero salvage value. Year 1 Net income $17,000 Year 2 $47,000 Year $62,000 Year 4 $43,000 Year 5 $120,000 Compute the machine's payback period (ignore taxes). (Round payback period answer to 3 decimal places.) Ending Book Value - Computation of Annual Depreciation Expense Beginning Annual Depr. Accumulated Book Value (40% of Book Depreciation at Value) Year-End 231,000 9 2,400 92.400 138,600 5 5,440 147,840 83,160 3 3,264 181,104 49,896 19,958 201,062 29,938 1 1,975 213,037 138,600 83,160 49,896 29,938 17,963 Annual Cash Flows Depreciation Net Cash Flow Mat Cash Flow Net income $ (231,000) 17,000 47,000 62,000 43,000 120,000 92,400 55,440 33,264 19,958 11,975 109,400 102,440 95.264 62.958 131.975 Cumulative Cash Flow $ (231.000) 211,840 307,104 X 402,368 465,326 597 301 Payback period onde was expected in a celor a formula based calculation is incorrect; no points deducted 2.201years

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing

Authors: Karla M. Johnstone, Audrey A. Gramling, Larry E. Rittenberg

8th International Edition

0538477660, 978-0538477666

More Books

Students also viewed these Accounting questions

Question

Explain basic guidelines for effective multicultural communication.

Answered: 1 week ago

Question

Identify communication barriers and describe ways to remove them.

Answered: 1 week ago

Question

Explain the communication process.

Answered: 1 week ago