A project currently generates sales of $16 million, variable costs equal 50% of sales, and fixed costs are $3.2 million. The firms tax rate is 40%. Assume all sales and expenses are cash items.

a. What are the effects on cash flow, if sales increase from $16 million to $17.6 million? (Input the amount as positive value. Enter your answer in dollars not in millions.)

Cash Flow____ by____

b. What are the effects on cash flow, if variable costs increase to 60% of sales? (Input the amount as positive value. Enter your answer in dollars not in millions.)

Cash Flow____ by____