PS31 #1

Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube Goldberg Machines. This new equipment, the RGM-7000, will allow Caspian Sea Drinks to expand production. It will cost $14.00 million fully installed and will be fully depreciated over a 20.00 year life, then removed for no cost. The RGM-7000 will result in additional revenues of $3.03 million per year and increased operating costs of $719,788.00 per year. Caspian Sea Drinks' marginal tax rate is 32.00%. The incremental cash flows for produced by the RGM-7000 are Answer format: Currency: Round to: 2 decimal places