Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help Compute the payback period for each of these two separate investments: a. A new operating system for an existing machine is expected to

please help

image text in transcribed
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 four 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 Choose Numerator: Choose Denominator: Payback Period Cost of investment Annual net cash flow E Payback period a. $ 250,000 $ 120,115 2.08 years b $ 170,000 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Accounting Principles Volume II

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

16th Canadian edition

1259261433, 978-1260305838

More Books

Students also viewed these Accounting questions

Question

In what two primary areas do formal institutions affect alliances?

Answered: 1 week ago