Elmdale Enterprises is deciding whether to expand is 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) 405 Year 1 Year 2 Revenues 1279 155.7 COGS and Operating Expenses (other than depreciation) 37.7 674 Depreciation 214 Increase in Net Working Capital 3.9 8.6 Capital Expenditures 349 375 Marginal Corporate Tax Rate 35% 35% a. What are the incremental earnings for this project for years 1 and 27 (Note: Assume any incremental cost of goods sold is included as part of operating experies) b. What are the free cash flows for this project for years 1 and 2? Sales Operating Expenses Depreciation EBIT 5 Income tax at 35% $ Unlevered Net Income