1a

Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.80 million and create incremental cash flows of $510,028.00 each year for the next five years. The cost of capital is 11.61%. What is the profitability index for the J-Mix 2000?

Answer format: Number: Round to: 3 decimal places.

1b

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 $2.91 million per year and increased operating costs of $799,739.00 per year. Caspian Sea Drinks' marginal tax rate is 23.00%. The internal rate of return for the RGM-7000 is _____.

Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434))

1c

What is the value today of a money machine that will pay $3,039.00 per year for 24.00 years? Assume the first payment is made 6.00 years from today and the interest rate is 12.00%.

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