Question

A machine can be purchased for $140,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied using a five-year life and a zero salvage value. Year 1 Year 2 Year 3 Year 4 Year 5 Net income $9,500 $23,500 $64,000 $35,500 $94,000 Compute the machine's payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and round payback period answer to 3 decimal places.)

Name: a machine can be purchased for 140000 and used for five years yielding the following net incomes in projecting net incomes straight line depreciation is applied using a five year life and a 56939
Uploaded: 2022-05-07T18:02:21-08:00
Duration: 6 min 2 s
Channel: Rahul Mahato
Description: a machine can be purchased for 140000 and used for five years yielding the following net incomes in projecting net incomes straight line depreciation is applied using a five year life and a 56939

          A machine can be purchased for $140,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied using a five-year life and a zero salvage value.

Year 1     Year 2     Year 3     Year 4     Year 5
Net income $9,500   $23,500   $64,000   $35,500   $94,000

Compute the machine's payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and round payback period answer to 3 decimal places.)

Added by Andrea C.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Rahul Mahato

05/07/2022

Step 1

Given: Cost of the machine = $140,000 Useful life = 5 years Salvage value = $0 Depreciation expense per year = (Cost - Salvage Value) / Useful life Depreciation expense per year = ($140,000 - $0) / 5 Depreciation expense per year = $28,000 Show more…

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A machine can be purchased for $140,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied using a five-year life and a zero salvage value. Year 1 Year 2 Year 3 Year 4 Year 5 Net income $9,500 $23,500 $64,000 $35,500 $94,000 Compute the machine's payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and round payback period answer to 3 decimal places.)