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 following incomplete incremental free cash flow projections $($in millions of dollars$)$:

The relevant CCA rate for the capital expenditures is $20\%.$ Assume assets are never sold.

a$.$ For this base$-$case scenario, what is the NPV of the plant to manufacture lightweight tractors?

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. What is the NPV of this project if revenues are $10\%$ higher than forecast? What is the NPV of this project if revenues are $10\%$ lower than forecast?

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 $$30\mathrm{.}43$ 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 $$ million. $($Round to two decimal places.$)$