NARRBEGIN: Gamma Electronics Gamma Electronics

question 59

Multiple Choice

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 NPV of the investment?

• A) $213,745
• B) $185,865
• C) $713,745
• D) $500,000

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