Question: PLEASE ANSWER ALL!! Attempts Ciopian Sea Drinks is considering the purchase of a plum juicer -- the PJX5. There is no planned increase in production.

PLEASE ANSWER ALL!!  PLEASE ANSWER ALL!! Attempts Ciopian Sea Drinks is considering the purchase
of a plum juicer -- the PJX5. There is no planned increase

Attempts Ciopian 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 PuX5 will cost $1.93 million fully installed and has a 10 year ife. It will be depreciated to a book value of $204 205.00 and sold for that amount in year 10, b. The Engineering Department spent $14.760.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $16,203.00. d. The PJX5 will reduce operating costs by $456 788.00 per year e CSD's marginal tax rate is 20.00% 1. CSD is 71.00% equity-financed 9 CSD's 10.00-year, semi-annual pay, 6,56% coupon bond sells for $1.006.00 CSD's stock currently has a market value of $21.54 and Mr. Bensen believes the market estimates that dividends will grow at 3 97% forever. Next year's dividend is projected to be $146 Submit Answer format: Currency Round to: 2 decimal places 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 $28.00 million. The plant and equipment will be depreciated over 10 years to a book value of $2.00 million, and sold for that amount in year 10. Net working capital will increase by $1.25 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $9.23 million per year and cost $1.52 million per year over the 10-year life of the project. Marketing estimates 17.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 22.00%. The WACC is 13.00%. Find the NPV (net present value) Submit Answer format: Currency: Round to: 2 decimal places 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 $24.00 million. The plant and equipment will be depreciated over 10 years to a book value of $3.00 million, and sold for that amount in year 10. Net working capital will increase by $1.27 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $8.98 million per year and cost $2.14 million per year over the 10-year life of the project. Marketing estimates 14-00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 27 00%. The WACC is 13.00%. Find the IRR (Internal rate of return) Submit Answer format: Percentage Round to 4 decimal places (Example: 9.2434%. % sign required. WWW accept decimal format rounded to 6 decimal places (ex 0.092434)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!