A machine can be purchased for $284,000 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 $ 21,000 $ 34,000 $ 72,000 $ 54,000 $ 139,000

Compute the machine's payback period (ignore taxes). (Round payback period answer to 3 decimal places.)

Computation of Annual Depreciation Expense Year Beginning Annual Depr. (40% Accumulated Ending Book Book Value of Book Value) Depreciation at Year-End Value 1 2 3 4 5 Annual Cash Flows Year Net income Depreciation Net Cash Flow Cumulative Cash Flow 0 $ (284,000) $ (284,000) 1 21,000 2 34,000 3 72,000 72,000 72,000 4 54,000 54,000 126,000 5 139,000 139,000 265,000 Payback period = years