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    sjdebois's Avatar
    sjdebois Posts: 2, Reputation: 1
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    #1

    May 13, 2009, 09:50 AM
    payback period computation; even cash flows
    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's Avatar
    sjdebois Posts: 2, Reputation: 1
    New Member
    		  
    #2

    May 13, 2009, 12:12 PM

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