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#1 Caspian Sea Drinks is considering the purchase of a plum juicer the PJX5. There is no planned increase in production. The PJX5 will reduce
#1 Caspian Sea Drinks is considering the purchase of a plum juicer the PJX5. There is no planned increase in production. The PJX5 will reduce costs by squeezing more juice from each plum and doing so in a more efficient manner. Mr. Bensen gave Derek the following information. What is the NPV of the PJX5? unanswered not_submitted a. The PJX5 will cost $2.23 million fully installed and has a 10 year life. It will be depreciated to a book value of $264,383.00 and sold for that amount in year 10. Attempts Remaining: Infinity b. The Engineering Department spent $48,297.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $20,324.00. d. The PJX5 will reduce operating costs by $435,574.00 per year. e. CSD's marginal tax rate is 38.00%. f. CSD is 62.00% equity-financed. g. CSD's 12.00-year, semi-annual pay, 5.87% coupon bond sells for $968.00. h. CSD's stock currently has a market value of $24.31 and Mr. Bensen believes the market estimates that dividends will grow at 2.17% forever. Next year's dividend is projected to be $1.52. #1 Caspian Sea Drinks is considering the purchase of a plum juicer the PJX5. There is no planned increase in production. The PJX5 will reduce costs by squeezing more juice from each plum and doing so in a more efficient manner. Mr. Bensen gave Derek the following information. What is the NPV of the PJX5? unanswered not_submitted a. The PJX5 will cost $2.23 million fully installed and has a 10 year life. It will be depreciated to a book value of $264,383.00 and sold for that amount in year 10. Attempts Remaining: Infinity b. The Engineering Department spent $48,297.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $20,324.00. d. The PJX5 will reduce operating costs by $435,574.00 per year. e. CSD's marginal tax rate is 38.00%. f. CSD is 62.00% equity-financed. g. CSD's 12.00-year, semi-annual pay, 5.87% coupon bond sells for $968.00. h. CSD's stock currently has a market value of $24.31 and Mr. Bensen believes the market estimates that dividends will grow at 2.17% forever. Next year's dividend is projected to be $1.52
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