- Caspian Sea Drinks Is Considering The Purchase Of A Plum Juicer The Pjx5 There Is No Planned Increase In Production 1 (62.23 KiB) Viewed 20 times
– 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 $2.45 million fully installed and has a 10
year life. It will be depreciated to a book value of $146,612.00
and sold for that amount in year 10.
b. The Engineering Department spent $21,138.00 researching the
various juicers.
c. Portions of the plant floor have been redesigned to
accommodate the juicer at a cost of $21,598.00.
d. The PJX5 will reduce operating costs by $332,733.00 per
year.
e. CSD’s marginal tax rate is 28.00%.
f. CSD is 75.00% equity-financed.
g. CSD’s 17.00-year, semi-annual pay, 6.80% coupon bond sells
for $1,049.00.
h. CSD’s stock currently has a market value of $20.89 and Mr.
Bensen believes the market estimates that dividends will grow at
3.73% forever. Next year’s dividend is projected to be $1.56.
Please help me with the answer, thank you!
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 $2.45 million fully installed and has a 10 year life. It will be depreciated to a book value of $146,612.00 and sold for that amount in year 10 b. The Engineering Department spent $21,138.00 researching the various juicers. c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $21,598.00. d. The PJX5 will reduce operating costs by $332,733.00 per year. e. CSD's marginal tax rate is 28.00%. f. CSD is 75.00% equity-financed. g. CSD's 17.00-year, semi-annual pay, 6.80% coupon bond sells for $1,049.00 h. CSD's stock currently has a market value of $20.89 and Mr. Bensen believes the market estimates that dividends will grow at 3.73% forever. Next year's dividend is projected to be $1.56. a Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))