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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ac6adb4-73a5-4925-94d0-7190cea724a2%2F74ce393a-bd42-4ac4-a4f3-3b5d047fe3b6%2F8ajj04f_processed.jpeg&w=3840&q=75)
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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