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 $2.00 million fully installed and has a 10 year life. It will be depreciated to a book value of

$263.147.00 and sold for that amount in year 10.

b. The Engineering Department spent $16.410.00 researching the various juicers

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of 517,012.00.

d. The PJX5 will reduce operating costs by S387.712.00 per year.

e. CD's marginal tax rate is 30.00%.

f. CSD is 70.00% equity-financed

g. CD's 20.00-year, semi-annual pay 5.03% coupon bond sells for $1.040.00

h. CD's stock currently has a market velve of 524.10 and Mr. Bensen belleves the market estimates that dividends will

grow at 4.40% forever. Next year's dividend is projected to be $1.51

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 $2.00 millon fully installed and has a 10 year life. It will be depreciated to a book value of $263,147.00 and sold for that amount in year 10 . b. The Engineering Department spent $16.410.00 researching the various juicers. c. Portions of the plant fioor have been redesigned to accommodate the juicer at a cost of $17,012:00. d. The PJXs will reduce operating costs by $387,712.00 per year e. CSD's marginal tax rate is 30.00%. 4. CSD. is 70.00% equity-financed 9. OSD's 20.00-year, aem-annual pay, 6.03% coupon bond sels for $1,040.00. h. CSD s stock currently has a market value of 324.10 and Mi. Bansen bel eves the market estimates that divdends wiil grow ak, 4.40% forevet, Next year's dividend is projected to be 51.51