A machine can be purchased for $288,000 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 $ 23,000 $ 35,000 $ 51,000 $ 58,000 $ 128,000 Compute the machines payback period (ignore taxes).

A machine can be purchased for $288,000 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 $23,000 Year 2 $35,000 Year 3 $51,000 Year 4 $58,000 Year 5 $128,000 Net income Compute the machine's payback period (ignore taxes). (Round payback period answer to 3 decimal places.) Computation of Annual Depreciation Expense Year Beginning Book Value Annual Depr. (40% of Book Value) Accumulated Depreciation at Year-End Ending Book Value 1 2 3 4 5 Annual Cash Flows Year Net income Depreciation Net Cash Flow Cumulative Cash Flow $ (288,000) 0 $ 1 (288,000) 23,000 35,000 51,000 2 3 4 58,000 128,000 5 Payback period = years