Mike is considering the purchase of a plum juicer the JX5. There is no planned increase in production. The JX5 will reduce costs by squeezing more juice from each plum and doing so in a more efficient manner. Mr. rick gave jim the following information. What is the IRR of the JX5?

a. The JX5 will cost $1.84 million fully installed and has a 10 year life. It will be depreciated to a book value of $297,745.00 and sold for that amount in year 10.

b. The Engineering Department spent $21,267.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $21,005.00.

d. The JX5 will reduce operating costs by $489,179.00 per year.

e. mike's marginal tax rate is 32.00%.

f. mike is 72.00% equity-financed.

g. mikes 11.00-year, semi-annual pay, 5.89% coupon bond sells for $1,008.00.

h. mikes stock currently has a market value of $20.82 and Mr. rick believes the market estimates that dividends will grow at 2.09% forever. Next years dividend is projected to be $1.45.