A machine can be purchased for $248,000 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 $11,000 Year 2 $41,000 Year 3 $80,000 Year 4 $50,000 Year 5 $129,000 Compute the machine's payback period (ignore taxes). (Round payback period answer to 3 decimal places.) Computation of Annual Depreciation Expense Annual Depr. (40% Accumulated of Book Value) Depreciation at Year-End Beginning Book Value Year Ending Book Value 1 2 3 4 5 Annual Cash Flows Year Net income Depreciation Net Cash Flow Cumulative Cash Flow $ (248,000) 0 $ 1 2 (248,000) 11,000 41,000 80,000 50,000 129,000 3 4 5 Payback period - years Sooky has a spotter truck with a book value of $48,000 and a remaining useful life of 5 years. At the end of the five years the spotter truck will have a zero salvage value. The market value of the spotter truck is currently $36,000. Sooky can purchase a new spotter truck for $128,000 and receive $31.800 in return for trading in its old spotter truck. The new spotter truck will reduce variable manufacturing costs by $25,800 per year over the five- year life of the new spotter truck. The total increase or decrease in income by replacing the current spotter truck with the new truck (ignoring the time value of money) is: Multiple Choice $32,800 Increase $31,800 increase $128.000 decrease $32.800 decrease $31,800 decrease