A project currently generates sales of $5 million, variable costs equal 50% of sales, and fixed costs are $1.0 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 $5 million to $5.5 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 55% of sales? (Input the amount as positive value. Enter your answer in dollars not in millions.)

cash flow....by....?

Please, can you solve by using hand-written solution, step by step, and recalling formulas