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

1. 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.
2. A machine costs $200,000, has a $13,000 salvage value, is expected to last eleven years, and will generate an after-tax income of $39,000 per year after straight-line depreciation.

Payback Period
	Choose Numerator:	/	Choose Demoninator	=	Payback Period
	Cost of Investment		Annual Net Cash Flow	=	Payback Period
a.	250,000	/		=
b.	39,000	/		=