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sjdebois
May 13, 2009, 09:50 AM
A new operating machine is expected to cost $520,000 and have a useful life of six years. The system yields an incremental after-tax income of $150,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000.

Find the payback period...


I have used the formula for payback period and got the wrong answer. Does the salvage value of an effect on the payback period?
sjdebois
May 13, 2009, 12:12 PM
i got an answer of 3.47, but the online homework manager is tellin me that i am wrong