2 2 Buhlerindustries is a tum implement manufacturer Management is currently evaluating a proposal to build a plant that wil manufacture lightweight tractors Butler plans to use a cost of capital of 12 to evaluate this project Based on extensive research, it has prepared the following incompleto incrementaltro cash flow projections in millions of dollars) Free Cash Flow (5000,0001) Year o Years 1-9 Year 10 Revenues 110.00 110.00 Manufacturing expenses (other than depreciation) - 3400 - 3400 Marketing expenses - 9.00 - 9.00 - CCA 2 ? EBIT 2 -Taxes (35%) 2 = Unlevered net income 7 - CCA 2 - Increases in networking capital -5.00 -5.00 - Capital expenditures 146.00 Continuation value 11.00 = Free cash flow -146.00 2 The relevant CCA rate for the capital expenditures is 15%. Assume assets are never sold a For this base-case scenano what is the NPV of the plant to manufacture lightweight tractors? b. Based on input from the marketing department Buhler is uncertain about its revenue forecast In particular, management would like to examine the sensitivity of the NPV to the revenue assumptions What is the NPV of this project if revenues are 10% higher than forecast? What is the NPV of this project if revenues are 10% lower than forecast? 2 Using the indirect method requires a separate calculation of the CCA tax shield What is the present value of the CCA tax shiold? The present, value of the CCA tax shield is sl million (Round to two decimal places)