A project currently generates sales of $$10$ million, variable costs equal $50\%$ of sales, and fixed costs are $$2$ million. The firm's tax rate is

$21\%.$ Assume all sales and expenses are cash items.

a$.$ What are the effects on cash flow, if sales increase from $$10$ million to $$11$ million?

b$.$ What are the effects on cash flow, if variable costs increase to $65\%$ of sales?

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Required $A$

Required B

What are the effects on cash flow, if sales increase from $$10$ million to $$11$ million?

Note: Input the amount as positive value. Enter your answer in dollars not in millions.