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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. Year 1 Year 4 Year 5 Income $10,000 $37,500 $100,000 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) Year Initial invest Year 1 Year 2 Year 3 Year 4 Year 5 S Year 2 $25,000 Net Income Depreciation Net Cash Flow $ (150,000) 10,000 25,000 50,000 37,500 100,000 Year 3 $50,000 Payback period Cumulative Cash Flow $ (150,000)

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. Year 1 Year 4 Year 5 Income $10,000 $37,500 $100,000 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) Year Initial invest Year 1 Year 2 Year 3 Year 4 Year 5 S Year 2 $25,000 Net Income Depreciation Net Cash Flow $ (150,000) 10,000 25,000 50,000 37,500 100,000 Year 3 $50,000 Payback period Cumulative Cash Flow $ (150,000)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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. Year 4 Year 5 Income $10,000 $37,500 $100,000 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) Year Initial invest Year 1 Year 2 Year 3 Year 4 Year 5 $ Net Income Depreciation Net Cash Flow $ (150,000) 10,000 25,000 Year 2 $25,000 50,000 37,500 100,000 Year 3 $50,000 Payback period Cumulative Cash Flow $ (150,000)
Transcribed Image Text: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. Year 4 Year 5 Income $10,000 $37,500 $100,000 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) Year Initial invest Year 1 Year 2 Year 3 Year 4 Year 5 $ Net Income Depreciation Net Cash Flow $ (150,000) 10,000 25,000 Year 2 $25,000 50,000 37,500 100,000 Year 3 $50,000 Payback period Cumulative Cash Flow $ (150,000)
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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