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	124.5		157.2
Operating Expenses (other than depreciation)	33.3		52.7
Depreciation	27.1		40.6
Increase in Net Working Capital	3.9		7.6
Capital Expenditures	29.1		37.2
Marginal Corporate Tax Rate	21	%	21	%

A) What are the incremental earnings for this project for years 1 and 2? (Note: Assume any incremental cost of goods sold is included as part of operating expenses.)

Calculate the incremental earnings of this project below:(Round to one decimal place.)

Incremental Earnings Forecast (millions)		Year 1		Year 2
Sales	$		$
Operating Expenses	$		$
Depreciation	$		$
EBIT	$		$
Income tax at 21%	$		$
Unlevered Net Income	$		$

B) What are the free cash flows for this project for years 1 and 2?