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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

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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 $2.00 million, and sold for the amount in year 10. Net wording capital will increase by $1.00 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $8.56 million per year and cont 51.81 milion per year over the 10- year life of the project Marketing estimates 14.00% of the buyers of the diet drink will be people who wil switch from the regular drink. The marginal tax rate is 24.00%. The WACCS 10.00%. Find the NPV et prsent value)

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