Exercise 24-4 (Algo) Payback period, unequal cash flows, and depreciation adjustment LO P1 A machine can be purchased for $90,000 and used for five years, yielding the following income. This income computation includes annual depreciation expense of $18,000. Income Year 1 $6,000 Year 2 $15,000 Year 3 $36,000 Year 4 $22,500 Year 5 $60,000 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) Answer is not complete. Year Net Income Net Cash Cumulative Net Depreciation Flow Cash Flow Initial invest $ (90,000) S (90,000) Year 1 $ 6,000 S 18,000 24,000 (66,000) Year 2 15,000 18,000 Year 3 36,000 18,000 Year 4 22,500 18,000 Year 5 60,000 18,000 0 0 Payback period =
Exercise 24-4 (Algo) Payback period, unequal cash flows, and depreciation adjustment LO P1 A machine can be purchased for $90,000 and used for five years, yielding the following income. This income computation includes annual depreciation expense of $18,000. Income Year 1 $6,000 Year 2 $15,000 Year 3 $36,000 Year 4 $22,500 Year 5 $60,000 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) Answer is not complete. Year Net Income Net Cash Cumulative Net Depreciation Flow Cash Flow Initial invest $ (90,000) S (90,000) Year 1 $ 6,000 S 18,000 24,000 (66,000) Year 2 15,000 18,000 Year 3 36,000 18,000 Year 4 22,500 18,000 Year 5 60,000 18,000 0 0 Payback period =
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 24-4 (Algo) Payback period, unequal cash flows, and depreciation adjustment LO P1
A machine can be purchased for $90,000 and used for five years, yielding the following income. This income computation includes
annual depreciation expense of $18,000.
Income
Year 1
$6,000
Year 2
$15,000
Year 3
$36,000
Year 4
$22,500
Year 5
$60,000
Compute the machine's payback period. (Round payback period answer to 2 decimal places.)
Answer is not complete.
Year
Net Income
Net Cash
Depreciation
Cumulative Net
Flow
Cash Flow
Initial invest
$
(90,000)
$
(90,000)
Year 1
$
6,000
$
18,000
24,000
(66,000)
Year 2
15,000
18,000
Year 3
36,000
18,000
Year 4
22,500
18,000
Year 5
60,000
18,000
0
0
Payback period =
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