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The NPV of the project is $ .. 01) 947,482.57 O2) 1,022,568.58 3) 1,041,352.40 4) 1,055,958.08 5) 1,106,048.65 Orange Monster Drinks is considering the purchase

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The NPV of the project is $ .. 01) 947,482.57 O2) 1,022,568.58 3) 1,041,352.40 4) 1,055,958.08 5) 1,106,048.65 Orange Monster Drinks is considering the purchase of a plum juicer - the Moment Maid. The company is provided with the following information. The juicer will cost $2.5 million fully installed and has a 15-year life. It will be depreciated to a book value of $400,000 and sold for that amount in year 15. The sale of new juice will generate $850,000 in sales each year for the next 15 years. Because of the expansion, operating costs will increase by $300,000 per year. The company will increase net working capital by $280,000 at the beginning of the project, and it will be liquidated at the end of the project. The Engineering Department spent $25,000 researching the various juicers. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $35,000 Orange Monster Drinks' marginal tax rate is 35.00%. Orange Monster Drinks is 55.00% equity-financed. Orange Monster Drinks' 16.00-year, semi-annual pay, 6% coupon bond sells for S962.00. Orange Monster Drinks' stock currently has a market value of $20 and the company believes the market estimates that dividends will grow at 25% forever. Next year's dividend is projected to be $1.68

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