b. Calculate the free cash flows for Year 1 of this project below: (Round to one decimal place.) Free Cash Flow (millions) Year 1 CCA Capital Expenditure Change in NWC Free Cash Flow Calculate the free cash flows for Year 2 of this project below: (Round to one decimal place.) Year 2 ca Free Cash Flow (millions) CCA Capital Expenditure Change in NWC Free Cash Flow Calculate the incremental earnings for Year 2 of this project below: (Round to one decimal place.) Year 2 Incremental Earnings Forecast (millions) Sales $ Operating Expenses CCA EBIT $ Income tax at 35% Unlevered Net Income $ Etobicoke Enterprises is deciding whether to expand its production facilities. Although long-term cash flows are difficult to estimate, management has projected the following cash flows for the first two years (in millions of dollars): Revenues Operating Expenses (other than depreciation) CCA Increase in Net Working Capital Capital Expenditures Marginal Corporate Tax Rate Year 1 128.6 38.1 22.2 2.9 27.5 35% Year 2 160.7 53.6 40.5 8.2 36.4 35% 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 the first two years? ..... a. Calculate the incremental earnings for Year 1 of this project below: (Round to one decimal place.) Incremental Earnings Forecast (millions) Year 1 Sales Operating Expenses CCA EBIT Income tax at 35% Unlevered Net Income Calculate the incremental earnings for Year 2 of this project below: (Round to one decimal place.)