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 four 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 $170,000, has a $14,000 salvage value, is expected to last nine years, and will generate an after-tax income of $41,000 per year after straight-line depreciation. Payback Period Choose Numerator: 1 Choose Denominator: = Cost of investment / Annual net cash flow $ 260,000/ bS 170,000 $ 58,333) = Payback Period Payback period 2.91 years