Exercise 25-5 Payback period computation; even cash flows LO P1 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 five 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 $210,000. has a $13,000 salvage value, is expected to last seven years, and will generate an after-tax income of $39,000 per year after straight-line depreciation Answer is complete but not entirely correct. Payback Period Choose Choose Numerator: Payback Period Denominator Annual net cash Cost of investment Payback period 250,000 120.115 210,000 $ 33.714 X years Denominator flow