Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Compute the payback period for each of these two separate investments: a. A new operating system for an existing machine is expected to cost $250,000
Compute the payback period for each of these two separate investments: a. 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. b. A machine costs $170,000, has a $13,000 salvage value, is expected to last nine years, and will generate an after-tax income of $39,000 per year after straight-line depreciation. Payback Period 1 Choose Denominator: 1 Annual net cash flow = Payback Period Payback period Choose Numerator: Cost of investment a. $ 250,000 b. $ 170,000 /
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started