A machine can be purchased for $295,000 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		$	20,000			$	50,000			$	71,000			$	52,000			$	130,000

Compute the machines 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 $ (295,000) 0 1 2 $ (295,000) 20,000 50,000 71,000 52,000 130,000 3 4 71,000 52,000 130,000 71,000 123,000 253,000 5 Payback period years