A project currently generates sales of $18 million, variable costs equal 60% of sales, and fixed costs are $3.6 million. The firm's tax rate is 35%. Assume all sales and expenses are cash items.

a.What are the effects on cash flow, ifsales increase from $18 million to $19.8 million?(Input the amount as positive value. Enter your answer in dollars not in millions.)

Cash flow increases by ....

b.What are the effects on cash flow, if variable costs increase to 70% of sales?(Input the amount as positive value. Enter your answer in dollars not in millions.)

Cash flow decreases by ....