Question

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 $14.00 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 $3.34 million per year and increased operating costs of $676,990.00 per year. Caspian Sea Drinks' marginal tax rate is 23.00%. The internal rate of return for the RGM-7000 is _____.

Answer 1