Orange Monster Drinks is considering the purchase of a plum juicer the Moment Maid. The company is provided with the following information.

1. The juicer will cost $2.5 million fully installed and has a 15-year life. It will be depreciated to a book value of $400,000 and sold for that amount in year 15.
2. The sale of new juice will generate $850,000 in sales each year for the next 15 years.
3. Because of the expansion, operating costs will increase by $300,000 per year.
4. The company will increase net working capital by $280,000 at the beginning of the project, and it will be liquidated at the end of the project.
5. The Engineering Department spent $25,000 researching the various juicers.
6. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $35,000.
7. Orange Monster Drinks' marginal tax rate is 35.00%.
8. Orange Monster Drinks is 55.00% equity-financed.
9. Orange Monster Drinks' 16.00-year, semi-annual pay, 6% coupon bond sells for $962.00.
10. Orange Monster Drinks' stock currently has a market value of $20 and the company believes the market estimates that dividends will grow at 2.5% forever. Next year's dividend is projected to be $1.68.

What is the initial Cash Flow of this project?

Question 7 options:

	-2,000,000
	-2,900,000
	-2,750,000
	-2,780,000

What is the annual incremental cash flow?

Question 8 options:

	316,500
	356,500
	386,500
	406,500

What is the ending cash flow?

Question 9 options:

	1,086,500
	1,070,000
	1,056,500
	1,040,000

What is the WACC for this company?

Question 10 options:

	7.312%
	7.587%
	7.862%
	8.012%

What is the NPV of this project?

Question 11 options:

	885,147.52
	947,454.90
	987,875.22
	1,002,518.33

What is the IRR for the project?

Question 12 options:

	11.77%
	12.71%
	13.73%
	14.77%

What is the modified IRR?

Question 13 options:

	7.77%
	8.88%
	9.99%
	10.10%