Use the following information to answer the question(s) below. Taggart Transcontinental is considering adding a trucking division to expand the coverage of its existing rail lines. The trucking division will cost $1,000,000 and is expected to generate free cash flows of $100,000 for each of the next five years. Taggart Transcontinental forecasts that future free cash flows after year 5 will grow at 2% per year, forever. Taggart Transcontinental's cost of capital is 10%. The NPV for the trucking division is closest to:

		$250,000.
		$212,550.
		$312,500.
		$170,750.
		$200,000.

Ford Motor Company is considering launching a new line of Plug-in Electric SUVs. The heavy advertising expenses associated with the new SUV launch would generate operating losses of $35 million next year. Without the new SUV, Ford expects to earn pre-tax income of $80 million from operations next year. Ford pays a 21% tax rate on its pre-tax income. The amount that Ford Motor Company will owe in taxes next year without the launch of the new SUV is closest to:

		$9.45 million.
		$16.8 million.
		$56.0 million.
		$31.5 million.

Use the information for the question(s) below. Shepard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected the project will produce the following cash flows for the first two years (in millions).

Year

1

2

Revenues	1200	1400
Operating Expense	450	525
Depreciation	240	280
Increase in working capital	60	70
Capital expenditures	300	350
Marginal corporate tax rate	21%	21%

The incremental EBIT for the Shepard Industries project in year one is closest to:

		$750 million.
		$510 million.
		$595 million.
		$360 million.