Question
In: Finance
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
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 $24.00 million. 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 capital will increase by $1.18 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $9.43 million per year and cost $2.27 million per year over the 10-year life of the project. Marketing estimates 13.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 35.00%. The WACC is 10.00%. Find the IRR (internal rate of return).
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))
Just wanted to know that I'm doing the process right. thanks
Solutions
jeff jeffy answered 5 months agoRelated Solutions
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
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 $24.00 million. The
plant and equipment will be depreciated over 10 years to a book
value of $2.00 million, and sold for that amount in year 10. Net
working capital will increase by $1.49 million at the beginning of
the project and will be recovered at the end. The new...
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
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 $25.00 million. 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 capital will increase by $1.45 million at the beginning of
the project and will be recovered at the end. The new...
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
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 $24.00 million. The
plant and equipment will be depreciated over 10 years to a book
value of $1.00 million, and sold for that amount in year 10. Net
working capital will increase by $1.13 million at the beginning of
the project and will be recovered at the end. The new...
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
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 $24.00 million. The
plant and equipment will be depreciated over 10 years to a book
value of $1.00 million, and sold for that amount in year 10. Net
working capital will increase by $1.36 million at the beginning of
the project and will be recovered at the end. The new...
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
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 $23.00 million. The
plant and equipment will be depreciated over 10 years to a book
value of $2.00 million, and sold for that amount in year 10. Net
working capital will increase by $1.20 million at the beginning of
the project and will be recovered at the end. The new...
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
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 $24.00 million. 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 capital will increase by $1.35 million at the beginning of
the project and will be recovered at the end. The new...
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
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 $25.00 million. The
plant and equipment will be depreciated over 10 years to a book
value of $2.00 million, and sold for that amount in year 10. Net
working capital will increase by $1.23 million at the beginning of
the project and will be recovered at the end. The new...
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
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 $28.00 million. The
plant and equipment will be depreciated over 10 years to a book
value of $2.00 million, and sold for that amount in year 10. Net
working capital will increase by $1.31 million at the beginning of
the project and will be recovered at the end. The new...
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
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 $23.00 million. The
plant and equipment will be depreciated over 10 years to a book
value of $1.00 million, and sold for that amount in year 10. Net
working capital will increase by $1.33 million at the beginning of
the project and will be recovered at the end. The new...
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
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 $3.00 million, and sold for that amount in year 10. Net
working capital will increase by $1.34 million at the beginning of
the project and will be recovered at the end. The new...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Baked potatoes are normally wrapped in aluminum foil. How does this affect the cooling of the...
- What is the process to obtain biomass production
- A labor market has 50,000 people in the labor force. Each month, a fraction p of...
- A road with a radius of 72 m is banked so that a car can navigate...
- 1) If you had not dried the solid, would the calculated percent yield have been higher,...
- Two structures of alanine can be drawn that have a net charge of zero, but the...
- Co(II) was used as an internal standard to analyze a sample of Ti(IV) with atomic absorption...
ADVERTISEMENT