mike is considering the purchase of a plum juicer the XJC. There is no planned increase in production. The XJC 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 NPV of the XJC?

a. The XJC will cost $1.66 million fully installed and has a 10 year life. It will be depreciated to a book value of $134,737.00 and sold for that amount in year 10.

b. The Engineering Department spent $37,030.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $23,279.00.

d. The XJC will reduce operating costs by $357,677.00 per year.

e. mikes marginal tax rate is 34.00%.

f. mike is 60.00% equity-financed.

g. mike's 18.00-year, semi-annual pay, 6.56% coupon bond sells for $1,015.00.

h. mike's stock currently has a market value of $23.67 and Mr.Rick believes the market estimates that dividends will grow at 2.75% forever. Next years dividend is projected to be $1.77.