Compute the payback period for each of these two separate, Ask an Expert

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Compute the payback period for each of these two separate investments:

#1.) 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.

#2.) A machine costs $180,000, has a $13,000 salvage value, is expected to last eleven years, and will generate an after-tax income of $39,000 per year after straight-line depreciation.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9988868

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