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Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube...

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 $2.68 million per year and increased operating costs of $659,819.00 per year. Caspian Sea Drinks' marginal tax rate is 30.00%. The internal rate of return for the RGM-7000 is _____.

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Expert Solution

Calculate the IRR as follows:

Formulas:

jeff jeffy answered 1 year ago
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