Cracker Barrel, which operates restaurants and gift stores, is reexamining its policy of paying minimal dividends. In 1995, Cracker Barrel reported net income of $66 million; it had capital expenditures of $150 million in that year and claimed depreciation of only $50 million. The working capital in 1995 was $43 million on sales of $783 million. Looking forward, Cracker Barrel expects the following:

Net income is expected to grow 17% a year for the next five years.

During the five years, capital expenditures are expected to grow 10% a year, and depreciation is expected to grow 15% a year.

The working capital as a percentage of revenues is expected to remain at 1995 levels, and revenues are expected to grow 10% a year during the period.

The company has not used debt to finance its net capital expenditures and does not plan to use any for the next five years.

a. Estimate how much cash Cracker Barrel would have available to pay out to its stockholders over the next five years.

b. How would your answer change if the firm plans to increase its leverage by borrowing 25% of its net capital expenditure and working capital needs?