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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 to use
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 12.0% to evaluate this project. Based on extensive research, it has prepared the incremental free cash flow projections shown below (in millions of dollars): 10 Year 1-9 Revenues 100.0 Manufacturing Expenses (other than depreciation) - 35.0 Marketing Expenses - 10.0 Depreciation - 15.0 EBIT 40.0 Taxes at 35% - 14.0 Unlevered Net Income 26.0 Depreciation + 15.0 Additions to Net Working Capital -50 a. For this base-case scenario, what is the NPV of the plant to manufacture lightweight trucks? 100.0 - 35.0 - 10.0 - 15.0 40.0 - 14.0 26.0 + 15.0 -50 The NPV of the plant to manufacture lightweight trucks, based on the estimated free cash flow is $ million. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. 5 parts Clear All Check Answer remaining javascrintidoExercise(13)
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