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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 wil reduce

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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 wil 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 $2.10 million fully installed and has a 10 year life. It will be depreciated to a book value of $169,221.00 and sold for that amount in year 10, b. The Engineering Department spent $17.276.00 researching the various ulcers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $22 229,00 d. The PJX5 will reduce operating costs by $424,707.00 per year. e. CSD's marginal tax rate is 32.00% f. CSD is 75.00% equity-financed. 9. CSD's 10.00-year, semi-annual pay, 5.86% coupon bond sells for $1,016.00. h. CSD's stock currently has a market value of $20.65 and Mr. Bensen believes the market estimates that dividends will grow at 3.31% forever. Next year's dividend is projected to be $1.58

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