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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 $1.57 million fully installed and has a 10 year life. It will be depreciated to a book value of $145.706.00 and sold for that amount in year 10. b. The Engineering Department spent $47,099.00 researching the various juicers. C. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $22,264.00 d. The PJX5 will reduce operating costs by $352,332.00 per year. e. CSD's marginal tax rate is 36.00% 1. CSD is 69.00% equity-financed. 9. CSD's 15.00-year, semi-annual pay, 6.03% coupon bond sells for $1,020.00 h. CSD's stock currently has a market value of $23.98 and Mr. Bensen believes the market estimates that dividends will grow at 4.41% forever. Next year's dividend is projected to be $1.47

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