A project currently generates sales of $11.4 million, variable costs equal to 50% of sales, and fixed costs of $3.6 million. The firms tax rate is 30%.

a. What are the effects on the after-tax profits and cash flow, if sales increase from $11.4 million to $13.1 million. (Input all amounts as positive values. Do not round intermediate calculations. Enter your answers in millions rounded to 3 decimal places.)

After-tax profit (increased/decreased) by $____ million.

Cash flow (increased/decreased) by $______ million.

b. What are the effects on the after-tax profits and cash flow, if variable costs increase to 60% of sales. (Input all amounts as positive values. Do not round intermediate calculations. Enter your answers in millions rounded to 3 decimal places.)

After-tax profit (increased/decreased) by $____ million.

Cash flow (increased/decreased) by $______ million.