Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A machine can be purchased for $287,000 and used for five years, yielding the following net incomes. In projecting net incomes, double-declining depreciation is applied
A machine can be purchased for $287,000 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 $23,500 Year 2 $33,000 Year 3 $55,000 Year 4 $60,000 Year 5 $136,000 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 2 3 4 5 Annual Cash Flows Depreciation Net Cash Flow Year Net income Cumulative Cash Flow $ (287,000) 0$ (287,000) 1 23,500 2 33,000 3 55,000 4 60,000 5 136,000 3 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