. Your department has decided to upgrade three existing MRI machines. Use the payback method to determine the number of years to payback. Here are the assumptions (total, for all three) Purchase price = $180,000 Useful life of the upgrades/machines = 12 years Revenue the upgrades/machines will generate per year = $25,000 Direct operating costs = $7,000 Depreciating expense per year = $15,000 Step 1: Find the machines' expected net income (report in dollars only) Step 2. Find the net annual cash flow the machines are expected to generate (report in dollars only) Step 3: Compute the payback period in number of years (report number only) AJ