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? Compute the payback period for each of these two separate investments: a. A new operating system for an existing machine is expected to cost
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Compute the payback period for each of these two separate investments: a. A new operating system for an existing machine is expected to cost $260,000 and have a useful life of five years. The system yields an incremental after-tax income of $75,000 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 $14,000 salvage value, is expected to last ten years, and will generate an after-tax income of $41,000 per year after straight-line depreciation. a. b. Choose Numerator: Payback Period Choose Denominator: $ 2 = Payback Period Payback period 0.00 0 Step by Step Solution
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