Excercise 24-3 Payback period computation; straight-line depreciation LO P1

A machine can be purchased for $250,000 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. Net income Year $17.000 Year 2 $42,000 Year 3 Year 4 Year 5 $119,000 $63,500 $168,000 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.) Year Net Income Depreciation Net Cash Flow Cumulative Cash Flow 0 $ (250,000) $ (250,000) 1 $ 2 3 17.000 42,000 119,000 63,500 168,000 4 5 Payback period