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 $2.05 million fully installed and has a 10 year life. It will be depreciated to a book value of $259,510.00 and sold for that amount in year 10.

b. The Engineering Department spent $49,992.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $19,725.00.

d. The PJX5 will reduce operating costs by $446,307.00 per year.

e. CSDs marginal tax rate is 38.00%.

f. CSD is 60.00% equity-financed.

g. CSDs 18.00-year, semi-annual pay, 6.66% coupon bond sells for $1,026.00.

h. CSDs stock currently has a market value of $23.39 and Mr. Bensen believes the market estimates that dividends will grow at 2.45% forever. Next years dividend is projected to be $1.65.