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this is a mulit part question it follows cheggs rules Caspian Sea Drinks is considering the production of a diet drink. The expansion of the

this is a mulit part question it follows cheggs rules

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Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the purchase of the equipment necessary to produce the diet drink will cost $25.00 million. The plant and equipment will be depreciated over 10 years to a book value of $1.00 million, and sold for that amount in year 10. Net working capital will increase by $1.47 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $9.41 million per year and cost $2.24 million per year over the 10-year life of the project. Marketing estimates 19.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 32.00%. The WACC is 11.00%. Find the NPV (net present value).

Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the purchase of the equipment necessary to produce the diet drink will cost $26.00 million. The plant and equipment will be depreciated over 10 years to a book value of $1.00 million, and sold for that amount in year 10. Net working capital will increase by $1.13 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $9.37 million per year and cost $1.69 million per year over the 10-year life of the project. Marketing estimates 16.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 32.00%. The WACC is 13.00%. Find the IRR (internal rate of return).

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