Gamma Electronics Gamma Electronics Is Considering the Purchase of Testing Equipment That

question 79

Multiple Choice

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.
-Refer to Gamma Electronics.What's the payback period for the investment?

• A) 1.8 years
• B) 2.0 years
• C) 2.5 years
• D) 2.8 years

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Definitions:

Labia Majora

The larger, outer folds of skin that enclose and protect the external female genital organs.

Vestibule

An anatomical space or chamber, such as the central part of the labyrinth of the inner ear, which plays a role in balance.

Simple Payback Periods

The calculation used to determine how long it will take to recoup the initial investment in a project or purchase through savings or profits gained.

Not-For-Profit

An organization that operates for purposes other than generating profit, focusing instead on social, educational, or charitable objectives.