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$.23\mathrm{.}4\%$

b$.15\mathrm{.}0\%$

c$.34\mathrm{.}9\%$

d$.100\mathrm{.}0\%$

CALCULATE IRR BY HAND STEP BY STEP