Elmdale 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):

	Year 1	Year 2
Revenues	112.3112.3	153.8153.8
COGS and Operating expenses (other than depreciation)	49.649.6	55.555.5
Depreciation	29.729.7	37.437.4
Increase in working capital	5.45.4	8.38.3
Capital expenditures	28.328.3	40.240.2
Corporate tax rate	20 %20%	20 %20%

a. What are the incremental earnings for this project for years 1 and 2?

b. What are the free cash flows for this project for the first two years?