Caspian Sea Drinks is considering the purchase of a plum juicer - the PJXS. 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 Derok the following information. What is the IRR of the PJX5? a. The PJXS will cost $1.66 million fully installed and has a 10 year life, It will be depreciated to a book valuo of $257,124.00 and sold for that amount in year 10. b. The Engineering Department spent $48,616.00 researching the various juicers. a. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $18,897.00. d. The PJXS will reduce operating costs by $406,802.00 per yoar. 0. CSD'u marginal tax rato is 31.00%. 1. CSD is 58.00% equity-financed. 9. CSD» 12.00-year, semi-annual pay, 6.63% coupon bond sells for $1,038.00. h. CSD's stock currently has a market value of $23.50 and Mr. Bensen believes the market estimates that dividends will grow at 3.34% forever. Next yoar's dividend is projected to be $1.47. Submt Answer format: Percentage Round to: 2 decimal places (Exarmple: 9.24%, % sign required. Will accept decimal format
Caspian Sea Drinks is considering the purchase of a plum juicer - the PJXS. 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 Derok the following information. What is the IRR of the PJX5? a. The PJXS will cost $1.66 million fully installed and has a 10 year life, It will be depreciated to a book valuo of $257,124.00 and sold for that amount in year 10. b. The Engineering Department spent $48,616.00 researching the various juicers. a. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $18,897.00. d. The PJXS will reduce operating costs by $406,802.00 per yoar. 0. CSD'u marginal tax rato is 31.00%. 1. CSD is 58.00% equity-financed. 9. CSD» 12.00-year, semi-annual pay, 6.63% coupon bond sells for $1,038.00. h. CSD's stock currently has a market value of $23.50 and Mr. Bensen believes the market estimates that dividends will grow at 3.34% forever. Next yoar's dividend is projected to be $1.47. Submt Answer format: Percentage Round to: 2 decimal places (Exarmple: 9.24%, % sign required. Will accept decimal format
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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Question
![Caspian Sea Drinks is considering the purchase of a plum juicer - the PJX5. There is no planned incroase 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 Derok the following information. What is the IRR of the PJX5?
#2
a. The PJX5 will cost $1.66 million fully instaled and has a 10 year life. It wll be depreciated to a book value of
$257,124.00 and sold for that amount in year 10.
b. The Engineering Department spent $48,616.00 researching the various juicers.
a. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $18,897.00.
d. The PJXS will reduce operating costs by $496,802.00 per yoar.
0. CSD's marginal tax rate is 31.00%.
1. CSD is 58.00% equity-financed.
9. CSD» 12.00-yoar, semi-annual pay, 6.63% coupon bond sells for $1,038.00.
h. CSD's stock currently has a market value of $23.50 and Mr. Bensen believes the market estimates that dividends will
grow at 3.34% forever. Next year's dividend is projected to be $1.47.
Submit
Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Wil accept decimal format
rounded to 4 decimal places (ex: 0.0924)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8c35567e-5a8e-4edb-8a66-66d161b7f95c%2Fc5b79bed-b756-403d-8773-8090d9abc8be%2Fmvhy38b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Caspian Sea Drinks is considering the purchase of a plum juicer - the PJX5. There is no planned incroase 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 Derok the following information. What is the IRR of the PJX5?
#2
a. The PJX5 will cost $1.66 million fully instaled and has a 10 year life. It wll be depreciated to a book value of
$257,124.00 and sold for that amount in year 10.
b. The Engineering Department spent $48,616.00 researching the various juicers.
a. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $18,897.00.
d. The PJXS will reduce operating costs by $496,802.00 per yoar.
0. CSD's marginal tax rate is 31.00%.
1. CSD is 58.00% equity-financed.
9. CSD» 12.00-yoar, semi-annual pay, 6.63% coupon bond sells for $1,038.00.
h. CSD's stock currently has a market value of $23.50 and Mr. Bensen believes the market estimates that dividends will
grow at 3.34% forever. Next year's dividend is projected to be $1.47.
Submit
Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Wil accept decimal format
rounded to 4 decimal places (ex: 0.0924)
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