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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 524.00 milion. The plant and equipment will be depreciated over 10 years to a book value of $1.00 milison, and sold for that amount in year 10 . Net working capital will increase by $1.35 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $8.70 mision per year and cost $1.61 milion per year over the 10.year life of the project. Marketing estimates 10.00% of the buyeis of the diet drink will be people who will switch from the regular drink. The marginal fax rate is 25.00% The WACC is 15.00% Find the NPV (net present value)

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