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Gamma Electronics is considering the purchase of testing equipment that will cost $527,958 to replace old equipment. Assume the new machine will generate after-tax savings

Gamma Electronics is considering the purchase of testing equipment that will cost $527,958 to replace old equipment. Assume the new machine will generate after-tax savings of $121,945 per year over the next five years.

(T or F) If the appropriate discount rate is 5%, then the profitability index is approximately 1.0.

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