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$$ research, it has prepared the accompanying incremental free cash flow projections$($in millions of$$ dollars$).$ The relevant CCA rate for capital expenditures is $10\%.$ Assume assets are never sold.

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c$.$ Rather than assuming that cash flows for this project are$$ constant, management would like to explore the sensitivity of their analysis to possible growth in revenues and operating expenses.$$ 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 $2\%$ starting in Year $2.$ Management also plans to assume that the initial capital expenditures$($and$,$ therefore, CCA$),$ increases in net 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 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$$ x$-$axis and NPV on the$$ y$-$axis, for discount rates ranging from $5\%$ to $30\%.$ For what ranges of discount rates does the project have a positive NPV$?$c$.$ Rather than assuming that cash flows for this project are constant, management would like to explore the sensitivity of their analysis to possible growth in

revenues and operating expenses. Specifically, management would like to assume that revenues, manufacturing expenses, and marketing expenses are as

Free Cash Flows Projections

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S$.$ Create a graph, with

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