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Someone did a wrong answer that I posted last time, please fix it correctly. Thanks Caspian Sea Drinks is considering the purchase of a plum
Someone did a wrong answer that I posted last time, please fix it correctly. Thanks
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 NPV of the PJX5? a. The PJX5 will cost $1.76 million fully installed and has a 10 year life. It will be depreciated to a book value of $112,059.00 and sold for that amount in year 10 . b. The Engineering Department spent $19,905.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $19,321.00. d. The PJX5 will reduce operating costs by $317,441.00 per year. e. CSD's marginal tax rate is 32.00%. f. CSD is 68.00% equity-financed. g. CSD's 12.00-year, semi-annual pay, 6.88\% coupon bond sells for $1,022.00. h. CSD's stock currently has a market value of $21.78 and Mr. Bensen believes the market estimates that dividends will grow at 2.52% forever. Next year's dividend is projected to be $1.59. Answer format: Currency: Round to: 2 decimal placesStep by Step Solution
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