Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your answers to 2 decimal places.)
A machine can be purchased for $210,000 and used for 5 years, yielding the following net incomes. In projecting net incomes, doubledeclining balance depreciation is applied, using a 5year life and a zero salvage value. 

Year 1 
Year 2 
Year 3 
Year 4 
Year 5 

Net incomes 

$ 
13,000 


$ 
28,000 


$ 
53,000 


$ 
40,500 


$ 
103,000 

Compute the machine’s payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and payback period answer to 3 decimal places.)
Exercise 253 Payback period computation; even cash flows LO P1
Exercise 254 Accounting rate of return LO P2
Exercise 2517 Sales mix determination and analysis LO A1

Leave a reply