Question: Please show step-by-step answers so that I can understand how to solve this... Thank you. Problem 9 - 18 ab Question Help Buhler Industries is

 Please show step-by-step answers so that I can understand how tosolve this... Thank you. Problem 9 - 18 ab Question Help Buhler

Please show step-by-step answers so that I can understand how to solve this... Thank you.

Industries is a farm implement manufacturer , Management is currently evaluating aproposal to build a plant that will manufacture lightweig ight tractors Buhler

Problem 9 - 18 ab Question Help Buhler Industries is a farm implement manufacturer , Management is currently evaluating a proposal to build a plant that will manufacture lightweig ight tractors Buhler plans to use a cost of capital of 12 % to evaluate this project . Based on extensive research , it has prepared the following inco gincomplete incremental free cash flow projections ( in millions of dollars ) Free Cash Flow ( 5000,00 0s ) Year Years 1 - 9 Year 10 Revenues 98.00 99.00 Manufacturing expenses ( other than depreciation ) 37.00 37 00 Marketing expenses 10.00 10.00 - EBIT Taxes ( 35% ) Unlevered net income + CCA Increases in es in net working capita 500 5 00Increases in net working capital 5.00 DO Capital expenditures 143.00 Continuation value 1200 Free cash flow 143.00 The relevant CCA rate for the capital expenditures is 20% Assume assets are never sold For this base - case scenario , what is the NAV of the plant to manufacture lightweight trucks 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 NPY to to the revenue assumptions . What is the NPY of this project if revenues are 10% higher than forecast ? What is the NPY of this project if revenues are 10% lower than forecast

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