Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The assets required for the project were fully depreciated at the time of purchase. The financial staff has collected the following information on the project: Sales revenues Operating costs Interest expense $15 million 13.5 million 1 million The company has a 25% tax rate, and its WACC is 11%.

What is the project's cash flow for the first year (t = 1)?

If this project would cannibalize other projects by $0.5 million of cash flow before taxes per year, how would this change your answer to part a?