1. Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 75.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 75.0 when he fully retires, he will begin to make annual withdrawals of $102,647.00 from his retirement account until he turns 89.00. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 9.00% interest rate. 2.Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 70.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 70.0 when he fully retires, he will wants to have $3,152,752.00 in his retirement account. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 9.00% interest rate. 3. Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.87 million and create incremental cash flows of $622,737.00 each year for the next five years. The cost of capital is 11.99%. What is the profitability index for the J-Mix 2000? 4. The market price of a stock is $28.21 and it is expected to pay a $4.84 dividend next year. The dividend is expected to grow at 3.99% forever. What is the required rate of return for the stock? 5. A stock just paid a dividend of $1.76. The dividend is expected to grow at 25.83% for three years and then grow at 3.62% thereafter. The required return on the stock is 13.35%. What is the value of the stock? 6. Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube Goldberg Machines. This new equipment, the RGM-7000, will allow Caspian Sea Drinks to expand production. It will cost $12.00 million fully installed and will be fully depreciated over a 15 year life, then removed for no cost. The RGM-7000 will result in additional revenues of $3.18 million per year and increased operating costs of $705,776.00 per year. Caspian Sea Drinks' marginal tax rate is 31.00%. The internal rate of return for the RGM-7000 is _____. 7. 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 IRR of the PJX5? a. The PJX5 will cost $2.48 million fully installed and has a 10 year life. It will be depreciated to a book value of $242,797.00 and sold for that amount in year 10. b. The Engineering Department spent $45,613.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $21,389.00. d. The PJX5 will reduce operating costs by $357,453.00 per year. e. CSDs marginal tax rate is 22.00%. f. CSD is 58.00% equity-financed. g. CSDs 18.00-year, semi-annual pay, 6.39% coupon bond sells for $995.00. h. CSDs stock currently has a market value of $21.91 and Mr. Bensen believes the market estimates that dividends will grow at 2.07% forever. Next years dividend is projected to be $1.72. 8. 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 $2.24 million fully installed and has a 10 year life. It will be depreciated to a book value of $150,061.00 and sold for that amount in year 10. b. The Engineering Department spent $25,359.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $20,381.00. d. The PJX5 will reduce operating costs by $361,094.00 per year. e. CSDs marginal tax rate is 28.00%. f. CSD is 75.00% equity-financed. g. CSDs 15.00-year, semi-annual pay, 5.16% coupon bond sells for $1,016.00. h. CSDs stock currently has a market value of $21.41 and Mr. Bensen believes the market estimates that dividends will grow at 4.13% forever. Next years dividend is projected to be $1.69