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USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING FIVE (5) QUESTIONS Orange Monster Drinks is considering the purchase of a plum juicer the Moment Maid.

USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING FIVE (5) QUESTIONS 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 $2,500,000 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 new juicer 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; this amount will be recovered at the end of the life of the project. The Engineering department spent $25,000 researching the various juicers. Last month, portions of the plant floor were redesigned to accommodate the juicer. The cost of this modification was $150,000. The company that did the work sent Orange Monster Drinks an invoice last week; Orange Monster Drinks plans to pay the $150,000 tomorrow. Orange Monster Drinks marginal tax rate is 35%. Orange Monster Drinks is 55% equity-financed and 45% debt financed. Orange Monster Drinks 16-year, semi-annual payment, 6% coupon bonds sell for $962.00. Orange Monster Drinks stock currently has a market value of $20.00 and the company believes the market estimates that dividends will grow at 2.5% forever. Next years dividend is projected to be $1.68. 39. The initial cash flow of the project is $___________. 40. The incremental total cash flow of the project is in year 15 is $_________. 41. The IRR of the project is ______%. 42. The WACC of the Orange Monster Drinks is _______%. 43. The NPV of the project is $_______.

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