Question: 1. What are the incremental costs of accepting additional business?
2. A machine can be purchased for $300,000 and used for 5 years, yielding the following net incomes. In projecting net incomes, double-declining balance depreciation is applied, using a 5-year life and a $50,000 salvage value. Compute the machine's payback period (ignore taxes). (Round the payback period to two decimals.)
Year 1 Year 2 Year 3 Year 4 Year 5
Net incomes . . . . . . . . $20,000 $50,000 $100,000 $75,000 $200,000