QS 24 - 5 Payback period LOP Project A requires a $280 000 initial investment for new machinery with a five - year life and a salvage value of $30 000 . The company uses straight - line depreciation Project A is expected to yield annual net income of $20,000 per year for the next five years Compute Project A's payback period Payback Period Choose Numerator : Choose Denominator : Payback Period Cost of investment Annual net cash flow Payback period 250 000 X 1 20 000 X 2.50 years Red text indicates no response was expected in a cell or a formula-based calculation is incorrect ; no points deducted