125-5 Compute the payback period for each of these two separate investments (round the 2 3 A. Anew operating system for an existing machine is expected to cost $520,000 and have 4 a useful life of six years. The system yields an incremental after-tax income of $150,000 5 each year after deducting its straight-line depreciation. The predicted salvage value of the 6 7 8 Investment 9 Annual depreciation- show calculation below 10 Net Income - including depreciatiorn ayback period to two decimals system is $10,000 Complete the schedule below-green highlights Calculation of depreciation 12 Investment 13 Salvage 14 Net Depreciable value 15 Life 16 Annual depreciation 17 Now calculate the payback- show the formula in words first complete green highlights 18 19 20 21 Payback Now calculate the payback-show the #'s complete green highlights 23 B. A machine costs $380,000, has a $20,000 salvage value, is expected to last eight years, 24 and will generate an after-tax income of $60,000 per year after straight-line depreciation 25 26 Investment 27 Annual depreciation- show calculation below 28 Net Income - including depreciation 29 30 Investment 31 Salvage 32 Net Depreciable value 33 Life 34 35 Now calculate the payback- show the formula in words first complete green highlights 36 37 38 39 40 Complete the schedule below-green highlights Calculation of depreciation Annual depreciation Payback Now calculate the payback-show the #'s complete green highlights