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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 $26.00 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 $8.91 million per year and cost $2.04 million per year over the 10-year life of the project. Marketing estimates 17.00% of the buyers of the diet drink will be people who will switch from the regular drink The marginal tax rate is 34 00% The WACC Is 13.00% Find the NPV (net present value) Submit Answer format: Currency Round to 2 decimal places 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 $25 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 $1.04 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues or $9.11 million per year and cost $1.75 million per year over the 10-year life of the project Marketing estimates 20.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 34 00%. The WACC Is 13.00% Find the IRR (internal rate of return) Submit Answer format: Percentage Round to 4 decimal places (Example 92434%, % sign required Will accepr decima/ format rounded to 6 decimal places (ex 0092434))

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