A machine can be purchased for $267,000 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. Net income Year 1 $12,000 Year 2 $32,000 Year 3 $77,000 Year 4 $58,000 Year 5 $134,000 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 Year Beginning Book Value Ending Book Value 1 12.000 32,000 2 3 4 5 Annual Cash Flows Year Net income Depreciation Net Cash Flow Cumulative Cash Flow S (267,000) 0 S 1 2 (267.000) 12,000 32.000 77,000 58 000 3 77,000 58,000 77000 135,000 4 191 nnn 494 henn Computation of Annual Depreciation Expense Annual Depr. (40% Accumulated of Book Value) Depreciation at Year-End Year Beginning Book Value Ending Book Value 1 12,000 32,000 N 3 4 5 Annual Cash Flows Year Net income Depreciation Net Cash Flow Cumulative Cash Flow $ (267,000) 0 $ 1 2 (267,000) 12,000 32,000 77,000 58,000 134,000 3 77,000 58,000 134,000 77,000 135,000 269,000 4 5 years Payback period =