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a. What are the incremental earnings for this project for years 1 and 2? (Note: Assume any incremental cost of goods sold is included as
a. What are the incremental earnings for this project for years 1 and 2? (Note: Assume any incremental cost of goods sold is included as part of operating expenses.) b. What are the free cash flows for this project for years 1 and 2 ? \begin{tabular}{lcc} \hline & Year 1 & Year 2 \\ \hline Revenues & 124.4 & 168.5 \\ Operating Expenses (other than depreciation) & 32.4 & 52.8 \\ Depreciation & 23.3 & 40.2 \\ Increase in Net Working Capital & 2.3 & 7.6 \\ Capital Expenditures & 31.8 & 41.2 \\ Marginal Corporate Tax Rate & 21% & 21% \\ \hline \end{tabular}
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