A machine can be purchased for $80,000 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.

A machine can be purchased for $80,000 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 $5,300 Year 2 $13,300 Year 3 $35,000 Year 4 $19,900 Year 5 $53,200 Net income 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 $ (80,000) $ (80,000) $ 5,300 13,300 35,000 19,900 53,200 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 $290,000 and have a useful life of five years. The system yields an incremental after-tax income of $83,653 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $11,000. b. A machine costs $200,000, has a $15,000 salvage value, is expected to last ten years, and will generate an after-tax income of $46,000 per year after straight-line depreciation. Payback Period Choose Denominator: Choose Numerator: 7 = Payback Period Payback period