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A machine can be purchased for $190,000 and used for five years, yielding the following income. This income computation includes annual depreciation expense of $38,000. Year 1 Year 2 $12,800 $31,800 Year 3 $76,000 Income 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 Year 4 $47,900 Net Income Depreciation Net Cash Flow $ 12,800 31,800 76,000 47,900 127,200 Year 5 $127,200 $ (190,000) $ Payback period= Cumulative Net Cash Flow (190,000)

A machine can be purchased for $190,000 and used for five years, yielding the following income. This income computation includes annual depreciation expense of $38,000. Year 1 Year 2 $12,800 $31,800 Year 3 $76,000 Income 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 Year 4 $47,900 Net Income Depreciation Net Cash Flow $ 12,800 31,800 76,000 47,900 127,200 Year 5 $127,200 $ (190,000) $ Payback period= Cumulative Net Cash Flow (190,000)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A machine can be purchased for $190,000 and used for five years, yielding the following income. This income computation includes annual depreciation expense of $38,000. Year 1 Year 2 $12,800 $31,800 Year 3 $76,000 Year 5 $127,200 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) Income Year Initial invest Year 1 Year 2 Year 3 Year 4 Year 5 Year 4 $47,900 Net Income Depreciation Net Cash Flow $ $ 12,800 31,800 76,000 47,900 127,200 Cumulative Net Cash Flow (190,000) $ Payback period= (190,000)
Transcribed Image Text:A machine can be purchased for $190,000 and used for five years, yielding the following income. This income computation includes annual depreciation expense of $38,000. Year 1 Year 2 $12,800 $31,800 Year 3 $76,000 Year 5 $127,200 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) Income Year Initial invest Year 1 Year 2 Year 3 Year 4 Year 5 Year 4 $47,900 Net Income Depreciation Net Cash Flow $ $ 12,800 31,800 76,000 47,900 127,200 Cumulative Net Cash Flow (190,000) $ Payback period= (190,000)
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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