Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube Goldberg Machines.This new equipment, the RGM$-7000,$ will allow Caspian Sea Drinks to expand production. It will cost $$14\mathrm{.}00$ million fully installed and will be fully depreciated over a $20$ year life, then removed for no cost$.$ The RGM$-7000$ will result in additional revenues of $$3\mathrm{.}00$ million per year and increased operating costs of $$586,303\mathrm{.}00$ per year. Caspian Sea Drinks' marginal tax rate is $30\mathrm{.}00\%.$ If Caspian Sea Drinks uses a $12\mathrm{.}00\%$ discount rate, then the net present value of$*$ the RGM$-7000$ isSubmitAnswer format: Currency: Round to: $2$ decimal places.

C

Caspian Sea Drinks' is financed with $62\mathrm{.}00\%$ equity and the remainder in debt. They have $10\mathrm{.}00-$year, semi$-$annual pay, $5\mathrm{.}14\%$ coupon bonds which sell for $97\mathrm{.}35\%$ of par. Their stock currently has a market value of $$25\mathrm{.}11$ and Mr$.$ Bensen believes the market estimates that dividends will grow at $3\mathrm{.}59\%$ forever. Next year's dividend is projected to be $$2\mathrm{.}29.$Assuming a marginal tax rate of $32\mathrm{.}00\%,$ what is their WACC $($weighted average cost of capital$)?$