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Exercise 24-3 Payback period computation; straight-line depreciation LO P1 A machine can be purchased for $60,000 and used for five years, yielding the following net
Exercise 24-3 Payback period computation; straight-line depreciation LO P1
A machine can be purchased for $60,000 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 | Year 2 | Year 3 | Year 4 | Year 5 | ||||||||||||||||
Net income | $ | 3,900 | $ | 9,900 | $ | 32,000 | $ | 14,700 | $ | 39,600 | ||||||||||
Compute the machines payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and round payback period answer to 3 decimal places.)
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