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#34 unansw Caspian Sea Drinks is considering the purchase of a plum juicer - the PJX5. There is no planned increase in production. The PJX5

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#34 unansw 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? not_submi Attempts Remair In a. The PJX5 will cost $2.30 million fully installed and has a 10 year life. It will be depreciated to a book value of $156,909.00 and sold for that amount in year 10. b. The Engineering Department spent $12,864.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $24,620.00. d. The PJX5 will reduce operating costs by $371,584.00 per year. e. CSD's marginal tax rate is 27.00%. f. CSD is 68.00% equity-financed. g. CSD's 18.00-year, semi-annual pay, 5.48% coupon bond sells for $995.00. h. CSD's stock currently has a market value of $21.16 and Mr. Bensen believes the market estimates that dividends will grow at 3.53% forever. Next year's dividend is projected to be $1.77. Submit

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