NARRBEGIN: Gamma Electronics
Gamma Electronics
Gamma Electronics is considering the purchase of testing equipment that will cost $500,000 to replace old equipment.Assume the new machine will generate after-tax savings of $250,000 per year over the next four years.
-If Gamma Electronics has a 15% cost of capital,what's the IRR of the investment?
A) 23.4%
B) 15.0%
C) 34.9%
D) 100.0%
Correct Answer:
Verified
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