A machine can be purchased for $245,000 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				Year 2				Year 3				Year 4				Year 5
Net income		$	18,500			$	33,000			$	69,000			$	57,500			$	123,000

Compute the machines payback period (ignore taxes). (Round payback period answer to 3 decimal places.)

Computation of Annual Depreciation Expense Annual Depr. Accumulated Beginning (40% of Book Depreciation at Book Value Value) Year-End Year Ending Book Value 2 3 4 5 Annual Cash Flows Year Net income Depreciation Net Cash Flow Cumulative Cash Flow 0 $ (245,000) 1 2 $ (245,000) 18,500 33,000 69,000 57,500 123,000 3 4 5 Payback period = years