Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A machine can be purchased for $240,000 and used for five years, ylelding the following net incomes. In projecting net Incomes, double-declining depreciation is applied
A machine can be purchased for $240,000 and used for five years, ylelding the following net incomes. In projecting net Incomes, double-declining depreciation is applied using a five-year life and a zero salvage value. Net income Year 1 $15,588 Year 2 $47, eee Year 3 $78, eee Year 4 $56,000 Years $122,888 Compute the machine's payback period (Ignore taxes). (Round payback period answer to 3 declmal places.) Computation of Annual Depreciation Expense Annual Depr. (40% Accumulated of Book Value) Depreciation at Year-End Year Beginning Book Value Ending Book Value 1 240.000 144.000 2 3 4 5 Annual Cash Flows Year Net income Depreciation Net Cash Flow Cumulative Cash Flow (240,000) 0 $ 1 2 (240.000) 15,500 47.000 78,000 56.000 122.000 3 78.000 78,000 4 56.000 122.000 134,000 250.000 5 Payback period = years
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started