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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 $1.88 million fully installed and has a 10 year life. It will be depreciated to a book value of $214,065.00 and sold for that amount in year 10.

b. The Engineering Department spent $33,355.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $18,443.00.

d. The PJX5 will reduce operating costs by $453,490.00 per year.

e. CSDs marginal tax rate is 21.00%.

f. CSD is 63.00% equity-financed.

g. CSDs 17.00-year, semi-annual pay, 5.94% coupon bond sells for $987.00.

h. CSDs stock currently has a market value of $23.09 and Mr. Bensen believes the market estimates that dividends will grow at 2.60% forever. Next years dividend is projected to be $1.77.

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 production of a diet drink. The expansion of the plant and the purchase of the equipment necessary to produce the diet drink will cost $28.00 million. The plant and equipment will be depreciated over 10 years to a book value of $2.00 million, and sold for that amount in year 10. Net working capital will increase by $1.25 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $9.06 million per year and cost $2.04 million per year over the 10-year life of the project. Marketing estimates 13.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 26.00%. The WACC is 13.00%. Find the NPV (net present value).

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

#3 Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the purchase of the equipment necessary to produce the diet drink will cost $22.00 million. The plant and equipment will be depreciated over 10 years to a book value of $3.00 million, and sold for that amount in year 10. Net working capital will increase by $1.38 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $9.23 million per year and cost $2.35 million per year over the 10-year life of the project. Marketing estimates 15.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 21.00%. The WACC is 14.00%. Find the IRR (internal rate of return).