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 $1.93 million fully installed and has a 10 year life. It will be depreciated to a book value of $238,853.00 and sold for that amount in year 10. b. The Engineering Department spent $48,985.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $21,773.00. d. The PJX5 will reduce operating costs by $309,895.00 per year. e. CSDs marginal tax rate is 25.00%. f. CSD is 74.00% equity-financed. g. CSDs 13.00-year, semi-annual pay, 6.31% coupon bond sells for $976.00. h. CSDs stock currently has a market value of $22.09 and Mr. Bensen believes the market estimates that dividends will grow at 2.18% forever. Next years dividend is projected to be $1.79. Round to: 4 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 $1.00 million, and sold for that amount in year 10. Net working capital will increase by $1.03 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $9.17 million per year and cost $2.26 million per year over the 10-year life of the project. Marketing estimates 11.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 32.00%. The WACC is 13.00%. Find the IRR (internal rate of return). Round to: 4 decimal places