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Bauer Industries is an automobile manufacturer Management is currently evaluating a proposal to build a plant that will manufacture lightweight trucks. Bauer plans for a

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Bauer Industries is an automobile manufacturer Management is currently evaluating a proposal to build a plant that will manufacture lightweight trucks. Bauer plans for a conto capital of 11 9% to evaluate this project Based on extensive research, it has prepared the incremental free cash flow projections shown below in millions of dol) a. For this base-case scenano, 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 manager would like to examine the sensitivity of the NPV to the revenge assumptions What is the NPV of this project if revenues are 1046 higher than forecast? What is the NPV if revenues are 10% lower than forecast? c. Rather than assuming that cash flows for this project are constant managoment 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 petar 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 it the revenues and operating expenses grow by 5% per year rather than by 22 d. To examine the sensitivity of this 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 yaxis for discount rates ranging Submit qui Data table -X value the project Based on es (Click on the following icon in order to copy its contents into a spreadsheet) What is the NPV of this projed 0 y management would like to ass penditures and therefore den prating expenses grow by 5 pe on the yaxes for discount rate Year Revenues Manufacturing Expenses (other than depreciation) Marketing Expenses Depreciation EBIT Taxes at 21% Unlevered Net Income Depreciation Additions to Net Working Capital Capital Expenditures Continuation Value Free Cash Flow 1-9 973 352 99 149 373 -78 295 + 14.9 - 56 10 97.3 352 -9.9 149 373 78 29.5 +149 -56 1486 - 11.3 148.6 388 50.1 What is the NPV of this proje Dan

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