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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
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): Free Cash Flow ($000,000s) Year 0 Years 1-9 Year 10 Revenues 99.00 99.00 - Manufacturing expenses (other than depreciation) - 37.00 - 37.00 - Marketing expenses - 11.00 - 11.00 CCA ? ? = EBIT Taxes (35%) = Unlevered net income ? ? + CCA ? ? ? ? ? 2 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.) 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): Free Cash Flow ($000,000s) Year 0 Years 1-9 Year 10 Revenues 99.00 99.00 - Manufacturing expenses (other than depreciation) - 37.00 - 37.00 - Marketing expenses - 11.00 - 11.00 CCA ? ? = EBIT Taxes (35%) = Unlevered net income ? ? + CCA ? ? ? ? ? 2 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.)
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