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please help show work Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the purchase of the
please help show work
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 $28.00 million. The plant and equipment will be depreciated over. 10 years to a book value of $2.00 million, and sold for that amount in year 10 . Net working capital will increase by $1.15 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $9.40 million per year and cost $1.75 million per year over the 10-year life of the project. Marketing estimates 18.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 21.00%. The WACC is 15.00%. Find the NPV (net present value). Answer format: Currency: Round to: 2 decimal places. 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 $28.00 million. The plant and equipment will be depreciated over 10 years to a book value of $3.00 million, and sold for that amount in year 10 . Net working capital will increase by $1,49 million at the beginning of the project and will be recovered at the end. The now diet drink will produce revenues of $9.01 millon per year and cost \$2.49 million per year over the 10-year life of the project. Marketing estimates 14.00\% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 20.00%. The WACC is 10.00%. Find the IRA (internal rate of return). Answer format: Percentage Round to: 4 decimal places (Example: 2.2434%,% sign required. Wir accept decimal format rounded to 6 decimal places (ex: 0.092434 ) ) Step by Step Solution
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