A machine can be purchased for $70,000 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. Net income Year 1 $4,600 Year 2 $11,600 Year 3 $34,000 Year 4 $17,300 Year 5 $46,400 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.) Year Net Income Depreciation Net Cash Flow Cumulative Cash Flow 0 $ (70,000) $ (70,000) 1 $ 4,600 11,600 2 3 34,000 4 17,300 5 46,400 Payback period = Compute the payback period for each of these two separate investments: a. A new operating system for an existing machine is expected to cost $250,000 and have a useful life of six years. The system yields an incremental after-tax income of $72,115 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000. b. A machine costs $210,000, has a $13,000 salvage value, is expected to last eight years, and will generate an after-tax income of $39,000 per year after straight-line depreciation. Payback Period Choose Numerator: Choose Denominator: Payback Period Payback period 1 a. b. =