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.

X. Bauer decided to continue the project. They estimate that starting year 4 the annual free cash flows are expected to grow by 3% a year indefinitely. Calculate the NPV of this project

Y. Bauer estimated that 3% of the customers potentially interested in purchasing one of the existing truck models will buy a new truck instead. On average, Bauer sells 50,000 trucks for a wholesale price of $55,000. Assume cost of goods sold is estimated at 40% of truck sales. Calculate the NPV of this project

Z. Assume that after the life of the project Bauer plans to liquidate the factory line and estimates the proceeds to be around $25,000,000. Calculate the NPV of this project