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?

I got an answer of 3.47, but the online homework manager is telling me that I am wrong