USE THE TABLE BELOW TO ANSWER THE FOLLOWING TWO $(2)$ QUESTIONSUSE THE INFORMATION BELOW TO ANSWER THE FOLLOWING TWO $(2)$ 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 $$4,725,000,$ fully installed, and has a $15-$year life. It will be depreciated to a

book value of $$450,000$ and sold for that amount in year $15.$

The new juicer will generate $$960,000$ 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 $$90,000$ at the beginning of the project; this

amount will be recovered at the end of the life of the project.

The Engineering department spent $$45,000$ researching the various juicers.

Last month, portions of the plant floor were redesigned to accommodate the juicer. The cost of

this modification was $$175,000.$ The company that did the work sent Orange Monster Drinks an

invoice last week; Orange Monster Drinks plans to pay the $$175,000$ tomorrow.

Orange Monster Drinks' marginal tax rate is $32\%.$

Orange Monster Drinks is $45\%$ equity$-$financed and $55\%$ debt financed.

Orange Monster Drinks' $25-$years remaining to maturity, semi$-$annual payment, $6\%$ coupon bonds

sell for $$916\mathrm{.}00.$

Orange Monster Drinks' stock currently has a market value of $$20\mathrm{.}00$ and the company believes

the market estimates that dividends will grow at $2\mathrm{.}75\%$ forever. Next year's dividend is projected

to be $$1\mathrm{.}68.$

The WACC of the Orange Monster Drinks is

$\%.$

What is the NPV of this project?

Erma's Beauty Supply, Inc. is considering expanding the company's existing store. Erma's wants to lease

the office space next door. Erma's must spend $$140,000$ on new equipment to expand. The equipment is

expected to have a zero$-$salvage value and an $8-$year useful life. Erma's believes that the equipment will be

worthless at the end of its $8-$year life. Erma's believes it will have to increase net working capital by $$15,000$;

this amount will be recovered at the end of $8$ years. Last month, Erma's spent $$18,000$ to conduct a survey

of potential new customers in the area surrounding the current store to see if there was sufficient demand

for a larger store. Erma's estimates that net revenue will increase by $$135,000$ per year in the new store for

eight years. The direct expenses incurred to make those sales are $$75,000,$ including rent. The lease Erma's

is considering signing is for $8$ years. Erma's Beauty Supply has a marginal tax rate of $40\%$ and has a

weighted average cost of capital of $10\mathrm{.}0\%.$

What is the IRR of this project?

What is the NPV of this project?