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22 Caspian Sea Drinks is considering the purchase of a plum juicer -- the PJX5....

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Accounting

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22 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 IRR of the PJX5? a. The PJX5 will cost $2.14 million fully installed and has a 10 year life. It will be depreciated to a book value of $161,694.00 and sold for that amount in year 10. b. The Engineering Department spent $34,106.00 researching the various juicers c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $22.578.00, d. The PJX5 will reduce operating costs by $399,450.00 per year. e CSD's marginal tax rate is 22.00% 1. CSD is 62.00% equity-financed 9. CSD's 13.00-year, semi-annual pay, 6.47% coupon bond solls for $977.00, h. CSD's stock currently has a market value of $23.76 and Mr. Bensen believes the market estimates that dividends will grow at 2.50% forever Next year's dividend is projected to be $1.59. Submit Answer format: Porcentage Round to: 2 decimal places (Example: 9.24% % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))

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