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Caspian Sea Drinks is considering the purchase of a plum juicer - the PJX 5 . There is no planned increase in production. The PJX

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 $2.35 million fully installed and has a 10 year life. It will be depreciated to a book value of $129,442.00 and sold for that amount in year 10.
b. The Engineering Department spent $13,682.00 researching the various juicers.
c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $23,819.00.
d. The PJX5 will reduce operating costs by $446,795.00 per year.
e. CSD's marginal tax rate is 32.00%.
f. CSD is 60.00% equity-financed.
g. CSD's 17.00-year, semi-annual pay, 6.80% coupon bond sells for $957.00.
h. CSD's stock currently has a market value of $23.85 and Mr. Bensen believes the market estimates that dividends will grow at 3.71% forever. Next year's dividend is projected to be $1.65.
Answer format: Currency: Round to: 2 decimal places.
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