Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What is the NPV of the PJX5? Please show as much work as you can - thanks Caspian Sea Drinks is considering the purchase of

What is the NPV of the PJX5? Please show as much work as you can - thanks image text in transcribed
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 ma Bensen gave Derek the following information. What is the NPV of the PJX5? a. The PJX5 will cost $1.58 million fully installed and has a 10 year life. It will be depreciated to a book value of $248,276.00 and sold for that amount in year 10. b. The Engineering Department spent $46,253.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $23,533.00. d. The PJX5 will reduce operating costs by $461,980,00 per year. e. CSD's marginal tax rate is 27.00%. f. CSD is 56.00% equity-financed. g. CSD's 18.00-year, semi-annual pay, 5.26% coupon bond sells for $1,046.00. h. CSD's stock currently has a market value of $20.97 and Mr. Bensen believes the market estimates that dividends will grow at 3.96% forever. Next year's dividend is projected to be $1.44. Submit Answer format: Currency: Round to: 2 decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Handbook Of Pairs Trading

Authors: Douglas S. Ehrman

1st Edition

0471727075, 9780471727071

More Books

Students also viewed these Finance questions