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Question 39 (2.5 points) Listen Orange Monster Drinks is considering the purchase of a plum juicer (the Moment Maid). The company has assembled the following

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Question 39 (2.5 points) Listen Orange Monster Drinks is considering the purchase of a plum juicer (the Moment Maid). The company has assembled the following financial information about the proposed new product . The juicer will cost $2,550,000 fully installed and has a 15-year life. It will be depreciated to a book value of $430,000 and sold for that amount in year 15. . The sale of new juice will generate $840,000 in incremental sales each year for the next 15 years. . Because of the expansion, incremental operating costs will increase by $295,000 per year The company will increase net working capital by $260,000 at the beginning of the project, the net working capital will be liquidated at the end of the project Last year, the Engineering Department spent $25,000 researching the various juicers Portions of the plant floor have been redesigned to accommodate the juicer. The incremental cost of this redesign is estimated to be $27,000 Orange Monster Drinks' marginal tax rate is 25% Orange Monster Drinks will finance all Year 0 costs with 55% equity and 45% debt . Currently Orange Monster Drinks' 16-year, 6% coupon bond (semi-annual payments) sells for $1,040.00 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 $1.75. Based on the information provided above what is the initial investment (.e., CF0) for this project? Enter your answer as a dollar amount rounded, if necessary to 0 decimal places. Do not include the dollar sign or any commas in your answer For example record $14 240, 716 84 as 14240717 If the final value is a net cash outflow put a hyphen before your number with no space between the hyphen and the number For example, enter a cash outflow of $1,243,200 as 1243200 Your

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