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 Year 2 Year 3 Year 5. Year 1. $6,000 $15,000 $36,000 $60,000 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 Net Income Depreciation Net Cash Flow $ Year 4 $22,500 6,000 15,000 36,000 22,500 60,000 $ Cumulative Net Cash Flow (90,000) $ (90,000) Payback period

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...
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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
Year 3
Year 5.
$6,000
$36,000
$60,000
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
$
Year 2
$15,000
6,000
15,000
36,000
22,500
60,000
Year 4
$22,500
Net Cash Flow
$
Cumulative Net Cash
Flow
(90,000) $
Payback period-
(90,000)
Transcribed Image Text: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 Year 3 Year 5. $6,000 $36,000 $60,000 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 $ Year 2 $15,000 6,000 15,000 36,000 22,500 60,000 Year 4 $22,500 Net Cash Flow $ Cumulative Net Cash Flow (90,000) $ Payback period- (90,000)
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