Cali Company 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):

Year 1 Year 2 Revenues Operating Expenses (other than depreciation) CCA Increase in Net Working Capital Capital Expenditures Marginal Corporate Tax Rate 129.4 44.9 29.7 3.7 26.4 35% 152.2 56.9 36.9 8.4 44.7 35% a. What are the incremental earnings for this project for years 1 and 2? (Note: Assume any increment ..... 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% lii Unlevered Net Income