A machine can be purchased for $300,000 and used for 5 years, yielding the following net incomes. In projecting net incomes, double declining balance depreciation is applied, using a 5 year life and a $50,000 salvage value. Compute the machine’s payback period (ignore taxes). (Round the payback period to two decimals.)
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
|
Net cash flows |
$20,000 |
$50,000 |
$100,000 |
$75,000 |
$200,000 |