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 $2.13 million fully installed and has a 10 year life. It will be depreciated to a book value of

$230.256.00 and sold for that amount in year 10.

b. The Engineering Department spent $43,288.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $20.571.00.

d. The PJX5 will reduce operating costs by $400,823.00 per year.

e. CD's marginal tax rate is 21.00%.

f. CSD is 66.00% equity-financed.

g. CD's 18.00-year, semi-annual pay. 6.48% coupon bond sells for $1,000.00.

h. csD's stock currenty has a market value of $22.04 ana Mr. Bensen believe s the market estimates that dividends vill

grow at 2.31% forever. Next year's dividend is projected to be $1.67

Caspian Sea Drinks is considering the purohase 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? 3. The PJX5 will cost $2.13 million fully installed and has a 10 year life. It will be depreciated to a book value of $230,260.00 and sold for that amount in year 10. b. The Engineeting Department spent $43,286,00 researching the various juicers. c. Portions of the plant fioor have been redesigned to accommodate the juicer at a cost of 520.571.00. d. The PJX5 will reduce operating costs by $400,823,00 per year. e. CSD's marginal tax rate is 2100% 1. CSD is 60.00% equity-financed 9. CSD: 18.00y eat, semi annual pty. 843% coupon bond selis for 51.000.00 K. CSCs stock currently has a market value of 322.04 and Mt, Eensen believes the market estimates that dividends will grow at 2.31% fortivec Next years dividend is projected to be 31.07 rounsed le to decima pieces (ox.0.0924)