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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

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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 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 $2.38 million fully installed and has a 10 year life It will be depreciated to a book value of $183 44700 and sold for that amount in year 10 b The Engineering Department spent $11,595.00 researching the various juicers C. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $19.931.00 d. The PJX5 will reduce operating costs by S388 406.00 per year e CSD's marginal tax rate is 28.00% f. CSD is 65.00% equity-financed 9 CSD's 14.00-year, semi-annual pay, 5.05% coupon bond sells for $1023.00 h CSO's stock currently has a market value of $20.99 and Mr Bensen believes the market estimates that dividends will grow at 2.03% forever Next year's dividend is projected to be S1 66

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