Exercise 24-4 Payback period; accelerated depreciation LO P1 A machine can be purchased for $257,000 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 5 Net income $11,000 $46,000 $78,000 $42,500 $125,000 Year 4 Compute the machine's payback period (ignore taxes) (Round payback period answer to 3 decimal places.) Computation of Annual Depreciation Expense Annual Depr. (40% Accumulated of Book Value) Depreciation at Year-End Beginning Book Value Year Ending Book Value 1 2 3 4 5 Annual Cash Flows Year Net Income Depreciation Not Cash Flow Cumulative Cash Flow $ (257,000) 0 $ 1 2 (257,000) 11,000 46,000 78,000 42,500 125,000 3 4 5 Payback period years