Caspian Sea Drinks is considering the purchase of a plum juicer the PJX5 There is no planned increase in production The PJX5 will reduce costs by squeezing more juice from each plum and doing so in a more efficient manner Mr Bensen gave Derek the following information What is the NPV of the PJX5 a The PJX5 will cost $1 88 million fully installed and has a 10 year life It will be depreciated to a book value of $294,486 00 and sold for that amount in year 10 b The Engineering Department spent $46,258 00 researching the various juicers c Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $17,841 00 d The PJX5 will reduce operating costs by $492,203 00 per year e CSDs marginal tax rate is 25 00 f CSD is 59 00 equity financed g CSDs 11 00 year, semi annual pay, 5 77 coupon bond sells for $998 00 h CSDs stock currently has a market value of $21 56 and Mr Bensen believes the market estimates that dividends will grow at 3 80 forever Next years dividend is projected to be $1 56 Caspian Sea Drinks is considering the purchase of a plum juicer the PJX5 There is no planned increase in production The PJX5 will reduce costs by squeezing more juice from each plum and doing so in a more efficient manner Mr Bensen gave Derek the following information What is the IRR of the PJX5 a The PJX5 will cost $2 19 million fully installed and has a 10 year life It will be depreciated to a book value of $282,426 00 and sold for that amount in year 10 b The Engineering Department spent $35,227 00 researching the various juicers c Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $19,899 00 d The PJX5 will reduce operating costs by $304,571 00 per year e CSDs marginal tax rate is 29 00 f CSD is 67 00 equity financed g CSDs 14 00 year, semi annual pay, 6 36 coupon bond sells for $976 00 h CSDs stock currently has a market value of $21 53 and Mr Bensen believes the market estimates that dividends will grow at 3 18 forever Next years dividend is projected to be $1 57

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Caspian Sea Drinks is considering the purchase of a plum juicer the PJX5. There is no planned increase in production. The PJX5 will reduce costs

Caspian Sea Drinks is considering the purchase of a plum juicer the PJX5. There is no planned increase in production. The PJX5 will reduce costs by squeezing more juice from each plum and doing so in a more efficient manner. Mr. Bensen gave Derek the following information. What is the NPV of the PJX5?

a. The PJX5 will cost $1.88 million fully installed and has a 10 year life. It will be depreciated to a book value of $294,486.00 and sold for that amount in year 10.

b. The Engineering Department spent $46,258.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $17,841.00.

d. The PJX5 will reduce operating costs by $492,203.00 per year.

e. CSDs marginal tax rate is 25.00%.

f. CSD is 59.00% equity-financed.

g. CSDs 11.00-year, semi-annual pay, 5.77% coupon bond sells for $998.00.

h. CSDs stock currently has a market value of $21.56 and Mr. Bensen believes the market estimates that dividends will grow at 3.80% forever. Next years dividend is projected to be $1.56.

a. The PJX5 will cost $2.19 million fully installed and has a 10 year life. It will be depreciated to a book value of $282,426.00 and sold for that amount in year 10.

b. The Engineering Department spent $35,227.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $19,899.00.

d. The PJX5 will reduce operating costs by $304,571.00 per year.

e. CSDs marginal tax rate is 29.00%.

f. CSD is 67.00% equity-financed.

g. CSDs 14.00-year, semi-annual pay, 6.36% coupon bond sells for $976.00.

h. CSDs stock currently has a market value of $21.53 and Mr. Bensen believes the market estimates that dividends will grow at 3.18% forever. Next years dividend is projected to be $1.57.