Question: please follow rounding instructions. will upvote if answer is correct. thank you for your time! Attempts Re Caspian Sea Drinks is considering the purchase of
Attempts Re 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 manner. Mr. Bensen gave Derek the following information. What is the NPV of the PJX5? a. The PJX5 will cost $1.85 million fully installed and has a 10 year life. It will be depreciated to a book value of $254,862.00 and sold for that amount in year 10. b. The Engineering Department spent $16,322.00 researching the various ulcers. c Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $21,412.00, a. The PJX5 will reduce operating costs by $326,557.00 per year. CSD's marginal tax rate is 32.00% f. CSD is 70.00% equity-financed 9. CSD's 11.00-year, semi-annual pay, 6.91% coupon bond sells for $1,005.00 h. CSD's stock currently has a market value of $20.06 and Mr. Benson believes the market estimates that dividends will grow at 2.39% forever Next year's dividend is projected to be $1.78. Submit Answer format: Currency: Round to: 2 decimal places
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
