Bauer Industries is a truck manufacturer. Management is currently evaluating a proposal to develop a new truck model. The company decided to start targeting urban females as potential truck owners. The life of this project is estimated at 3 years. Management has calculated that the costs of building another factory line equal $60,000,000, which will be depreciated using a straight line schedule over 10 years. The company will incur design and engineering costs of another $5,000,000 in year 0. The manufacturer expects a working capital contribution of $15,000,000 to build necessary inventory in year 0. Bauer expects to sell 6,000 trucks at a wholesale price of $60,000 in year 1. Revenue is expected to increase by 15% year-over-year in following years. Costs of goods sold are estimated at 40% of truck sales. Selling, general and administrative expenses equal to 20% of truck sales every year. Assume the tax rate of 35% and cost of capital of 10%. Hint: do not include depreciation in years 4 through 10 in the calculation of projects NPV.

A. Calculate Bauers net income in years 1-3

B. Calculate free cash flow in year 0

C. Calculate NPV of the project