Compute the payback period for each of these two separate investments:
(a) a new operating system for an existing machine is expected to cost $260,000 and have a useful life of four years. the system yields an incremental after-tax income of $75,000 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 $14,000 salvage value, is expected to last nine years, and will generate an after-tax income of $41,000 per year after straight-line depreciation.

1.89 years and 2.91 years

Explanation:

The formula to compute the payback period is shown below:

= Initial investment ÷ Net cash flow

For first case

The initial investment is $260,000

And, the net cash flow is shown below:

= Depreciation + incremental after tax income

where,

Depreciation equals to

= (Original cost - residual value) ÷ (useful life)

= ($260,000 - $10,000) ÷ (4 years)

= ($20,000) ÷ (4 years)  

= $62,500

And the incremental after tax income is $75,000

So, the net cash flow would equal to

= $62,500 + $75,000

= $137,500

So, the payback period would be

= $260,000 ÷ $137,500

= 1.89 years

For second case

The initial investment is $170,000

And, the net cash flow is shown below:

= Depreciation + incremental after tax income

where,

Depreciation equals to

= (Original cost - residual value) ÷ (useful life)

= ($170,000 - $14,000) ÷ (9 years)

= ($156,000) ÷ (9 years)  

= $17,333

And the incremental after tax income is $41,000

So, the net cash flow would equal to

= $17,333 + $41,000

= $58,333

So, the payback period would be

= $170,000 ÷ $58,333

= 2.91 years

the correct answer would be b, when, queen, calder hall and london.

explanation:

we always capitalize words when a paragraph or sentence is starting, when an important name is used, when a place is being written, or simply when a noun is used, etc. so in this sentence, sentence is starting from 'when', so it will be written in capital letters. secondly, queen is considered to be an important person, so it will also be written in capital letter. next, the name of the town is mentioned, i-e calder hall, which will also be written in capital letters. in the last,   city name is being used, 'london', which will also be written in capital letters. so option b is the most appropriate one.

e would be the answer