P8-24 (similar to) Question Help 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 12.4% to evaluate this project Based on extensive research, it has prepared the following increment free cash flow projections milions of dollars a For this base-case scenano, what is the NPV of the plant to manufacture lightweight trucks? b. Based on input from the marketing department Bus uncertain about its revenue forecast in particular, management would like to examine the sensitivity of the NPV the revenue assumptions What is the NPV of this project it revenues are 12% higher than forecast? What is the NPV drevenues are 12 lower than forecast c. Rather than assuming that cash flows for this project are constant management would like to explore the sensitivity of its 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 art and grow by 3% per year every year starting in year 2 Management also plans to assume that the initial capital expenditures and therefore depreciation), additions to working capital and continuation value remain as intilly specified in the tablo What is the NPV of this project under these wernative assumptions? How does the NPV change if the revenues and operating expenses grow by 6% per year rather than ty34 d. To examine the sensovity of this secase scenario) project to the discount into management would like to compute the NPV for different discount rates Create a graph, with the discount role on the axis and the NPV on the is for discount rates ranging from 5% to 30% For what ranges of discountates does the project have a positive NIVO a. For this buse-case scenario what is the NPV of the plant to manufacture lightweight trucks? The NPV of the estimated from cash flow is smilon (Round to two decimal places) ick on the following icon in order to copy its contents into a spreadsheet) 0 Year Revenues Manufacturing Expenses (other than depreciation) Marketing Expenses Depreciation EBIT Taxes at 20% Unlevered Net Income Depreciation Additions to Net Working Capital Capital Expenditures Continuation Value Free Cash Flow 1-9 95.0 - 33.4 -9.7 - 15 5 36.4 -7.28 29.12 +15.5 -5.8 10 95.0 - 33.4 -97 - 15.5 36.4 -7.28 29.12 + 15.5 -5.8 - 155.0 + 11.3 50 120 - 155.0 38.820