Compute the payback period for each of these two separate investments:

1. A new operating system for an existing machine is expected to cost $280,000 and have a useful life of five years. The system yields an incremental after-tax income of $80,769 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $11,000.
2. A machine costs $170,000, has a $15,000 salvage value, is expected to last ten years, and will generate an after-tax income of $44,000 per year after straight-line depreciation.

Payback Period
	Choose Numerator:	/	Choose Denominator:	=	Payback Period
	Cost of investment	/	Annual net cash flow	=	Payback period
a.	$280,000	/		=	0
b.	$170,000	/