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PLEASE ANSWER BOTH will thumbs up! I have very few questions left, and I cannot get these right. THANK YOU SO MUCH!!!! #35 Caspian Sea
PLEASE ANSWER BOTH will thumbs up! I have very few questions left, and I cannot get these right. THANK YOU SO MUCH!!!!
#35 Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the purchase of the equipment necessary to produce the diet drink will cost $23.00 million. The plant and equipment will be depreciated over 10 years to a book value of $1.00 million, and sold for that amount in year 10. Net working capital will increase by $1.29 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $8.68 million per year and cost $2.34 million per year over the 10-year life of the project. Marketing estimates 20.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 34.00%. The WACC is 14.00%. Find the NPV (net present value). Submit Answer format: Currency: Round to: 2 decimal places. #33 Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.62 million and create incremental cash flows of $634,688.00 each year for the next five years. The cost of capital is 8.17%. What is the profitability index for the J-Mix 2000? Submit Answer format: Number: Round to: 3 decimal placesStep by Step Solution
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