Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube Goldberg Machines. This new equipment, the RGM-7000, will allow Caspian Sea Drinks to expand production. It will cost $12.00 million fully installed and will be fully depreciated over a 15 year life, then removed for no cost. The RGM-7000 will result in additional revenues of $3.33 million per year and increased operating costs of $661,221.00 per year. Caspian Sea Drinks' marginal tax rate is 35.00 %. The internal rate of return for the RGM-7000 is Submit Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434))
Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube Goldberg Machines. This new equipment, the RGM-7000, will allow Caspian Sea Drinks to expand production. It will cost $12.00 million fully installed and will be fully depreciated over a 15 year life, then removed for no cost. The RGM-7000 will result in additional revenues of $3.33 million per year and increased operating costs of $661,221.00 per year. Caspian Sea Drinks' marginal tax rate is 35.00 %. The internal rate of return for the RGM-7000 is Submit Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434))
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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F129.
Transcribed Image Text:Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube Goldberg Machines.
This new equipment, the RGM-7000, will allow Caspian Sea Drinks to expand production. It will cost $12.00 million fully
installed and will be fully depreciated over a 15 year life, then removed for no cost. The RGM-7000 will result in additional
revenues of $3.33 million per year and increased operating costs of $661,221.00 per year. Caspian Sea Drinks' marginal
tax rate is 35.00%. The internal rate of return for the RGM-7000 is
Submit
Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal
format rounded to 6 decimal places (ex: 0.092434))
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