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 11.7% to evaluate this project. Based on extensive research. It has propored the following incremental free cash flow projections (in Millions of dolars) 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 projectif revenues are 8% Nigher than forecast? What is the NPV revenues are 8% lower than forecast? e. 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 2% per year every year starting in year 2. Management also 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 if the revenues and operating expenses grow by 5% per year rather than by 2%? d. To examine the son of this so cane scenario) projede to the discount rate, management would like to compute the NPV for different discount rates. Create a graph, with the discounts on the x-ods and the NPV on the year, for discount es ranging from 5% to 30%. For what ranges of discount rates does the project have a positive NPN? Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) a for Live 0 disc lates ce Year Revenues Manufacturing Expenses (other than depreciation) Marketing Expenses Depreciation EBIT Taxes at 20% Unlevered Net Income Depreciation Additions to Net Working Capital Capital Expenditures Continuation Value Free Cash Flow 1-9 99.0 - 35.5 - 10.1 - 14.6 38.8 -7.76 31.04 + 14.6 -4.7 10 99.0 - 35.5 - 10.1 - 14.6 38.8 -7.76 31.04 + 14,6 -4.7 tel - 146.0 + 11.7 52.640 -146.0 40.940 Print Done