Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help Caspian Sea Drinks is considering the purchase of a plum juicer - the PJX5. There is no planned increase in production. The PJX5

please help
image text in transcribed
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 IRR of the PJX5? a. The PJX5 will cost $1.88 million fully installed and has a 10 year life, It will be depreciated to a book value of $236,802.00 and sold for that amount in year 10 . b. The Engineering Department spent $40,078.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $22,287.00. d. The PJX5 will reduce operating costs by $469,426.00 per year. e. CSD's marginal tax rate is 29.00%. f. CSD is 67.00% equity-financed. 9. CSD's 10.00-year, semi-annual pay, 6.97% coupon bond sells for $1,011.00. h. CSD's stock currently has a market value of $24.59 and Mr. Bensen believes the market estimates that dividends will grow at 3.85% forever. Next year's dividend is projected to be $1.44. Answer format: Porcentage Round to: 2 decimal places (Example: 9.24%, \% sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Applications And Theory

Authors: Marcia Cornett, Troy Adair, John Nofsinger

6th Edition

1264101589, 9781264101580

More Books

Students also viewed these Finance questions