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Buhler Industries is a farm implement manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight tractors. Buhler plans to

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Buhler Industries is a farm implement manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight tractors. Buhler plans to use a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared tha frillowine t- lete incremental free cash flow projections (in millions of dollars): Using the indirect method requires a separate calculation of the CCA tax shield. What is the present value of the CCA tax shield? The present value of the CCA tax shield is : million. (Round to two decimal places.) a. For this base-case scenario, what is the NPV of the plant to manufacture lightweight tractors? The NPV is s million. (Round to two decimal places.) b. Based on input from the marketing department, Buhler is uncertain about its revenue forecast. In particular, management would like to examine the sensitivity of the NPV to the revenue assumptions. 1. What is the NPV of this project if revenues are 10% higher than forecast? The NPV is : million. (Round to two decimal places.) Buhler Industries is a farm implement manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight tractors. Buhler plans to use a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared tha frillowine t- lete incremental free cash flow projections (in millions of dollars): Using the indirect method requires a separate calculation of the CCA tax shield. What is the present value of the CCA tax shield? The present value of the CCA tax shield is : million. (Round to two decimal places.) a. For this base-case scenario, what is the NPV of the plant to manufacture lightweight tractors? The NPV is s million. (Round to two decimal places.) b. Based on input from the marketing department, Buhler is uncertain about its revenue forecast. In particular, management would like to examine the sensitivity of the NPV to the revenue assumptions. 1. What is the NPV of this project if revenues are 10% higher than forecast? The NPV is : million. (Round to two decimal places.)

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