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A machine can be purchased for $251,000 and used for five years, yielding the following net incomes

Accounting

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A machine can be purchased for $251,000 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. 
Net income 
Year 1 Year 2 Year 3 Year 4 Year 5 J $13,500 $36,000 $65,000 $59,000 $128,000 
Compute the machine's payback period (ignore taxes). (Round payback period answer to 3 decimal places.) 
Year Beginning Book Value 
Computation of Annual Depreciation Expense 
Annual Depr. (40% of Book Value) 
Accumulated Ending Book Depreciation at Year-End Value 
1 
2 
3 
4 
5 
Year Net income 
Annual Cash Flows 
Depreciation 
Net Cash Flow 
Cumulative Cash Flow 
0 
$ (251,000) 
1 
13,500 
2 
36,000 
3 
65,000 
$ (251,000) 
4 
59,000 
5 
128,000 
Payback period = years