Question
A machine can be purchased for $90,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied
A machine can be purchased for $90,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied using a five-year life and a zero salvage value. Year 1 Net income Year 2 $6,000 $15,000 Year 3 $36,000 Year 4 $22,500 Year 5 $60,000 Compute the machine's payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and round payback period answer to 3 decimal places.) Net Income Depreciation Net Cash Flow Cumulative Cash Flow Year 0 $ (90,000) $ 1 $ 6,000 2 15,000 3 36,000 4 22,500 5 60,000 Payback period search (90,000) 0 0
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