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 $170,000, has a $13,000 salvage value, is expected to last ten years, and will generate an after-tax income of $39,000 per year after straight-line depreciation. Payback Period Choose Numerator: / Choose Denominator: Cost of investment Annual net cash flow Payback Period Payback period 11 a. = b.: 11 0