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this a mulit part question it follows cheggs rules Caspian Sea Drinks is considering the purchase of a plum juicer the PJX5. There is no

this a mulit part question it follows cheggs rules

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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 $2.42 million fully installed and has a 10 year life. It will be depreciated to a book value of $129,202.00 and sold for that amount in year 10.

b. The Engineering Department spent $40,655.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $15,622.00.

d. The PJX5 will reduce operating costs by $322,046.00 per year.

e. CSDs marginal tax rate is 29.00%.

f. CSD is 66.00% equity-financed.

g. CSDs 13.00-year, semi-annual pay, 5.92% coupon bond sells for $986.00.

h. CSDs stock currently has a market value of $22.73 and Mr. Bensen believes the market estimates that dividends will grow at 4.41% forever. Next years dividend is projected to be $1.58.

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 IRR of the PJX5?

a. The PJX5 will cost $1.88 million fully installed and has a 10 year life. It will be depreciated to a book value of $131,686.00 and sold for that amount in year 10.

b. The Engineering Department spent $32,519.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $23,973.00.

d. The PJX5 will reduce operating costs by $338,655.00 per year.

e. CSDs marginal tax rate is 32.00%.

f. CSD is 75.00% equity-financed.

g. CSDs 16.00-year, semi-annual pay, 6.41% coupon bond sells for $964.00.

h. CSDs stock currently has a market value of $23.46 and Mr. Bensen believes the market estimates that dividends will grow at 3.83% forever. Next years dividend is projected to be $1.76.

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