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Exercise 26-4 (Static) Payback period, unequal cash flows, and depreciation adjustment LO P1 A machine can be purchased for $150,000 and used for five
Exercise 26-4 (Static) Payback period, unequal cash flows, and depreciation adjustment LO P1 A machine can be purchased for $150,000 and used for five years, yielding the following income. This income computation includes annual depreciation expense of $30,000. Income Year 1 $10,000 Year 2 $25,000 Year 3 $50,000 Year 4 $37,500 Year 5 $100,000 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) Year Net Income Depreciation Net Cash Flow Cumulative Cash Flow Initial invest $ (150,000) $ (150,000) 1 $ 10,000 $ 30,000 40,000 (110,000) 2 25,000 30,000 55,000 3 50,000 30,000 25,000 4 37,500 30,000 5 100,000 30,000 Payback period
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