1. Caspian Sea Drinks' is financed with 60.00% equity and the remainder in debt. They have 12.00-year, semi-annual pay, 5.63% coupon bonds which sell for 98.43% of par. Their stock currently has a market value of $24.75 and Mr. Bensen believes the market estimates that dividends will grow at 3.52% forever. Next years dividend is projected to be $2.17. Assuming a marginal tax rate of 27.00%, what is their WACC (weighted average cost of capital)?

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Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))

2. 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?

a. The PJX5 will cost $1.54 million fully installed and has a 10 year life. It will be depreciated to a book value of $205,076.00 and sold for that amount in year 10.

b. The Engineering Department spent $41,402.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $22,464.00.

d. The PJX5 will reduce operating costs by $364,708.00 per year.

e. CSDs marginal tax rate is 37.00%.

f. CSD is 72.00% equity-financed.

g. CSDs 10.00-year, semi-annual pay, 5.71% coupon bond sells for $980.00.

h. CSDs stock currently has a market value of $20.43 and Mr. Bensen believes the market estimates that dividends will grow at 3.87% forever. Next years dividend is projected to be $1.72.

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Answer format: Currency: Round to: 2 decimal places.