90.2K

Verified Solution

Link Copied!

Sigurd WW accept decima format JU 15 decimal places (ex 0.09243) Show Hint 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 $22.00 million. The plant and equipment will be depreciated over 10 years to a book value of $200 million, and sold for that amount in year 10. Net working capital will increase by $1.30 milion at the beginning of the project and will be recovered at the end. The new diet drink wil producere of $9.04 million per year and cost $2.09 million per year over the 10-year life of the project Marketing estimates 18.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rates 34.00%. The WACC is 14.00%. Find the NPV (net present value). Adempts Remaining in Suomi Answer format: Currency: Round to: 2 decimal places 84 Powe 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 $22.00 milion. 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 capita will increase by $1.44 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenue of $9.29 million per year and cost $1.78 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 11.00% Find the IRR (internal rate of return Apesan Sum 19.2918%

Answer & Explanation Solved by verified expert

See Answer