1. What is the present value of the project

2. What is the dollar present value of the project

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 30% 30% The free cash flow from Shepard Industries project in year one is closest to: A) $240 B) $300 C) -$5 D) $390