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1. Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.97 million

1. Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.97 million and create incremental cash flows of $698,658.00 each year for the next five years. The cost of capital is 10.45%. What is the net present value of the J-Mix 2000?

2. Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $2.00 million and create incremental cash flows of $570,892.00 each year for the next five years. The cost of capital is 8.58%. What is the internal rate of return for the J-Mix 2000?

3. A tax-exempt municipal bond has a yield to maturity of 4.67%. An investor, who has a marginal tax rate of 17.00%, would prefer and an otherwise identical taxable corporate bond if it had a yield to maturity of more than ____%.

Round all answers to 2 decimal places in % ex:9.24%

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