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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 $2.04 million fully installed and has a 10 year life. It will be depreciated to a book value of $150,227.00 and sold for that amount in year 10 . b. The Engineering Department spent $22,333.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $16,565.00. d. The PJX5 will reduce operating costs by $418,916.00 per year. e. CSD's misginal tax rate is 34.00%. f. CSD is 67.00% equity-financed. 9. CSD's 12.00-year, semi-annual pay, 5.87% coupon bond sells for $1,028.00. h. CSD's stock currently has a market value of $23.86 and Mr. Bensen believes the market estimates that dividends will grow at 2.26% forever. Next year's dividend is projected to be $1.73

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