Bauer Industries in an automobile manufacturer Management is currently avaturing a proposal to build a plant that will manufacture lightweight trucks. Bauer plans to use a cost of capital of 12.2% to evaluato this project Bwed on extensive research. It has prepared the following incremental tree cash flow projections in millions of dollars) a. For this base-case scenario, what is the NPV of the plant to manufacture lightweight trucks? b. Based on input from the marketing department, Base is uncertain about its revenue forecast in particular, management would like to camine the sensitivity of the NPV to the revenue assumptions What is the NPV of this projectif c. Rather than assuming that cash flows for this project are constant, management would like to explore the samvity of its analysis to pouble growth in revenues and operating expenses. Specifically, management would be to assume that revenues, manufacturing expenses and marketing expenses are as given in the table for year 1 and grow by 3% per year every year starting in year 2 Management also plans to assume that the real capital expenditures and therefore depreciation), additions to working capital and continuation value remain as itially specified in the table What is the NPV of this project under these teative assumptions? How does the NPV change it the revenues and operating expenses grow by 6% per year rather than by 3%? d. To examine the sensitivity of this base-case scenario) project to the discount rate, management would like to compute the NPV for different discount rates Create a graph with the discount rate on the s-axis and the NPV on the yaxis for discount rates ranging from 5% to 30%. For what ranges of discount rates does the project have a positive NPV? Data Table - X 10 1030 - 359 (Click on the following icon in order to copy its contents into a spreadsheet) Year 0 1.9 Revenues 1030 Manufacturing Expenses (other than depreciation) - 359 Marketing Expenses - 105 Depreciation -- 145 EBIT 421 Tres at 20% -8.42 Unlevered Net Income 3368 Depreciation +145 Addition to Net Working Capital -53 Capital Expenditures -1450 Continuation Value Free Cash Flow - 1650 42 000 -145 021 -8442 33 66 +14.5 -5.3 +112 50.080 Print Done FU-24 al loj Question Help Bauer Industries is an automobile manufacturer Management is currently evaluating a proposal to build a plant that will manufacture lightweight trucks Bauer plans to use a cost of capital of 12.2% to evaluate this project Based on extensive research has prepared the following incremental free cash flow projections in millions of dollars) a. For this base-case scarlo, what is the NPV of the plant to manufacture lightweight trucks? b. Based on input from the marketing department, Bauer 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 projectif reven we 12 higher than forecast? What is the NPV revenues are 12% lower than forecast? c. Rather than assuming that cash flows for this project are constant, management would like to explore the sensitivity of its analysis to possible growth in revenues and operating experSpecifically management would be to assume that revenues, manufacturing expenses and marketing expenses are as given in the table for year and grow by 3 per year every year starting in year 2. Management who plans to assume that the initial capital expenditures (and therefore depreciation) addition to working capital and continuation value remain as initially specified in the table. What is the NPV of this project under these alternative assumptions? How does the NPV change the revenues and operating expenses grow by 6% per year rather than by 37 d. To examine the sensitivity of this buse-case scenario) project to the discount rate management would be to compute the NPV for different discount rates Create a graph, with the discontrate on the roads and the NPV on the yes for discount rates ranging from 5% to 30%. For what range of discount rates does the project have a positive NPV? For this buse-case scenario what is the NPV of the plant to manufacture lightweight trucks? The NPV of the estimated free Data Table - X 10 1030 - 359 (Click on the following icon in order to copy its contents into a spreadsheet) Year 1-9 Revenues 1030 Manufacturing Expenses (other than depreciation) - 359 Marketing Expenses 105 Depreciation -145 EBIT 421 Taxes at 20% Unlevered Net Income 33.66 Depreciation Additions to Not Working Capital -53 Capital Expenditures - 1450 Continuation Value Free Cash Flow - 1450 42 880 - 10.5 - 14.5 42.1 -8.42 3368 +14.5 -53 + 112 54.080 Enter your answer in the ansa Bauer Industries is an automobile manufacturer Management is currently evaluating a proposal to build a plant that will manufacture lightweight trucks Bauer plans to use a cost of capital of 12 2% to evaluate this project. Based on extensive research, it has prepared the following incremental free cash flow projections (in millions of dollars). a. For this base-case scenario, what is the NPV of the plant to manufacture lightweight trucks? b. Based on input from the marketing department, Bauer 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 12% higher than forecast? What is the NPV If revenues are 12% lower than forecast? c. Rather than assuming that cash flows for this project are constant, management would like to explore the sensitivity of its analysis to possible growth in revenues and operating expenses Specifically, management would like to assume that revenues, manufacturing expenses, and marketing expenses are as given in the table for year 1 and grow by 3% per year every year starting in year 2. Management also plans to assume that the initial capital expenditures (and therefore depreciation) additions to working capital and continuation value remain as initially specified in the table. What is the NPV of this project under these alternative assumptions? How does the NPV change if the revenues and operating expenses grow by 6% per year rather than by 3%? d. To examine the sensitivity of this (base-case scenario) project to the discount rate, management would like to compute the NPV for different discount rates a. For this base-case scenario, what is the NPV of the plant to manufacture lightweight trucks? The NPV of the estimated free cash flow is s million (Round to two decimal places) M. pt 9 of 9 (6 complete) HW Score: 63 84%, 5.75 of 9 pts b. Based on input from the marketing department, Bauer 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 12% higher than forecast? What is the NPV if revenues are 12% lower than forecast? c. Rather than assuming that cash flows for this project are constant, management would like to explore the sensitivity of its analysis to possible growth in revenues and operating expenses. Specifically, management would like to assume that revenues, manufacturing expenses, and marketing expenses are as given in the table for year 1 and grow by 3% per year every year starting in year 2. Management also plans to assume that the initial capital expenditures (and therefore depreciation). additions to working capital and continuation value remain as initially specified in the table. What is the NPV of this project under these alternative assumptions? How does the NPV change if the revenues and operating expenses grow by 6% per year rather than by 3%? d. To examine the sensitivity of this (base-case scenario) project to the discount rate management would like to compute the NPV for different discount rates Create a graph with the discount rate on the x-axis and the NPV on the y-axis for discount rates ranging from 5% to 30%. For what ranges of discount rates does the project have a positive NPV? a. For this base-case scenar Data Table - The NPV of the estimated tre (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 1.9 Revenues 103.0 Manufacturing Expenses (other than depreciation) - 35.9 Marketing Expenses - 10.5 Depreciation - 14.5 EBIT 42.1 Taxes at 20% -842 Unlevered Net Income 33.68 Depreciation + 14.5 Additions to Net Working Capital -53 Capital Expenditures - 1450 Continuation Value Free Cash Flow - 145.0 42.880 10 103.0 - 35.9 - 10.5 - 14.5 421 -8.42 33.68 + 14.5 -53 Enter your answer in the an 5 parts remaining swer + 112 54 080 Print Done