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Posted on Jul 17, 2024

bare www Shaw Vw Vate Mandham 1800 .. - -OCA Uredne CCA --- 13.00 500 Using the whole the CCAWOW The OCAR Rosaction and 721

bare www Shaw Vw Vate Mandham 1800 .. - -OCA Uredne CCA --- 13.00 500 Using the whole the CCAWOW The OCAR Rosaction and 721 Homework: Lab 9 Question 13, Problem - HW Score: 73.334 11 15 ports O Points: 001 Save - Uncome - CCA - intl -500 -500 Capat 17 Canina Freeh - 1700 The Other 10 Force what the Phantom Badrum Biboutin cantitat han fort What is the 10% Using the weaktion of the CCA What is the There CCA to down) Save -u Buhler Industries is a farm implement manufacturer Management is currently evaluating a proposal to build a plant that will manufacture lightweight tractors. Buhler plans to use a cost of capital of 12% to evaluate this project Based on extensive research, it has prepared the following incomplete incremental free cash flow projections (in millions of dollars) Free Cash Flow (5000.000s) Year 0 Years 1-9 Year 10 Revenues 91.00 91.00 - Manufacturing expenses (other than depreciation) 38.00 38.00 Marketing expenses 9.00 -900 d: CCA ? ? = EBIT ? ? ord Taxes (35%) ? Unlevered net income 7 +CCA ? ? ? ? Using the Indirect method requires a separate calculation of the CCA tax shield. What is the present value of the CCA tax shield? The present value of the CCA tax shield is s million (Round to two decimal places.) in 2 Unlevered net income 7 + ? 2 - Increases in net working capital -5.00 -500 - Capital expenditures -147,00 + Continuation value 10.00 Free cash flow 147.00 The relevant CCA rate for the capital expenditures is 10%. Assume assets are never sold a For this base-case scenario what is the NPV of the plant to manufacture lightweight tractors? b Based on input from the mung 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 MPV of this project if revenues are 10% lower than forecast? ? ? Using the indirect method requires a separate calculation of the CCA tax shield What is the present value of the CCA tax shield? The present value of the CCA tax shield is smilion (Round to two decimal places) Points: 0 of 1 Save Buhler Industries is a farm implement manufacturer Management is currently evaluating a proposal to build a plant that will manufacture lightweight tractors Buhler plans to use a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incomplete incremental free cash flow projections (in millions of dollars) Free Cash Flow (5000,000s) Year 0 Years 1-9 Year 10 Revenues 91 00 91.00 - Manufacturing expenses (other than depreciation) 38.00 - 38.00 Marketing expenses - 9.00 - 9.00 - CCA 2 2 EBIT ? ? - Taxes (35%) ? 2 = Unlovered net income 2 2 +CCA 2 Using the indirect method requires a separato calculation of the CCA tax shield. What is the present value of the CCA tax shield? The present value of the CCA tax shield is s million (Round to two decimal places.) 2 S 29 n1 2 ? e net income ? CCA 2 - Increases in net working capital -5.00 -5.00 - Capital expenditures - 147.00 Continuation value 10.00 Free cash flow - 147.00 The relevant CCA rate for the capital expenditures is 10%. Assume assets are never sold. a. For this base-case scenario, 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? ? Using the indirect method requires a separate calculation of the CCA tax shield. What is the present value of the CCA tax shield? The present value of the CCA tax shield is million (Round to two decimal places) bare www Shaw Vw Vate Mandham 1800 .. - -OCA Uredne CCA --- 13.00 500 Using the whole the CCAWOW The OCAR Rosaction and 721 Homework: Lab 9 Question 13, Problem - HW Score: 73.334 11 15 ports O Points: 001 Save - Uncome - CCA - intl -500 -500 Capat 17 Canina Freeh - 1700 The Other 10 Force what the Phantom Badrum Biboutin cantitat han fort What is the 10% Using the weaktion of the CCA What is the There CCA to down) Save -u Buhler Industries is a farm implement manufacturer Management is currently evaluating a proposal to build a plant that will manufacture lightweight tractors. Buhler plans to use a cost of capital of 12% to evaluate this project Based on extensive research, it has prepared the following incomplete incremental free cash flow projections (in millions of dollars) Free Cash Flow (5000.000s) Year 0 Years 1-9 Year 10 Revenues 91.00 91.00 - Manufacturing expenses (other than depreciation) 38.00 38.00 Marketing expenses 9.00 -900 d: CCA ? ? = EBIT ? ? ord Taxes (35%) ? Unlevered net income 7 +CCA ? ? ? ? Using the Indirect method requires a separate calculation of the CCA tax shield. What is the present value of the CCA tax shield? The present value of the CCA tax shield is s million (Round to two decimal places.) in 2 Unlevered net income 7 + ? 2 - Increases in net working capital -5.00 -500 - Capital expenditures -147,00 + Continuation value 10.00 Free cash flow 147.00 The relevant CCA rate for the capital expenditures is 10%. Assume assets are never sold a For this base-case scenario what is the NPV of the plant to manufacture lightweight tractors? b Based on input from the mung 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 MPV of this project if revenues are 10% lower than forecast? ? ? Using the indirect method requires a separate calculation of the CCA tax shield What is the present value of the CCA tax shield? The present value of the CCA tax shield is smilion (Round to two decimal places) Points: 0 of 1 Save Buhler Industries is a farm implement manufacturer Management is currently evaluating a proposal to build a plant that will manufacture lightweight tractors Buhler plans to use a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incomplete incremental free cash flow projections (in millions of dollars) Free Cash Flow (5000,000s) Year 0 Years 1-9 Year 10 Revenues 91 00 91.00 - Manufacturing expenses (other than depreciation) 38.00 - 38.00 Marketing expenses - 9.00 - 9.00 - CCA 2 2 EBIT ? ? - Taxes (35%) ? 2 = Unlovered net income 2 2 +CCA 2 Using the indirect method requires a separato calculation of the CCA tax shield. What is the present value of the CCA tax shield? The present value of the CCA tax shield is s million (Round to two decimal places.) 2 S 29 n1 2 ? e net income ? CCA 2 - Increases in net working capital -5.00 -5.00 - Capital expenditures - 147.00 Continuation value 10.00 Free cash flow - 147.00 The relevant CCA rate for the capital expenditures is 10%. Assume assets are never sold. a. For this base-case scenario, 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? ? Using the indirect method requires a separate calculation of the CCA tax shield. What is the present value of the CCA tax shield? The present value of the CCA tax shield is million (Round to two decimal places)