Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Can someone help me with this question please! A machine can be purchased for $278,000 and used for five years, yielding the following net incomes.
Can someone help me with this question please!
A machine can be purchased for $278,000 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 5 Year 1 $11,500 Net income Year 2 $38,000 Year 3 $65,000 Year 4 $50,000 $126,000 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 0 $ $ (278,000) (278,000) 11,500 1 2 38,000 3 65,000 4 50,000 126,000 65,000 50,000 126,000 65,000 115,000 241,000 5 Payback period = yearsStep 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