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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 diel drink wit cost $27.00m IHion. The plant and equipment wall 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 $1.21 million at the beginning of the project and will be recovered at the end The new diet drink will produce revenues of $8.65 million per year and cost $1.88 million per year over the 10 -year life of the project. Marketing estimates 14.00% of the buyers of the diel drink witt be people whio wit switch from the regular drink. The marginal tax rate is 2800%. The WACC is 11.00%. Find the NPV (net present value)

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