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): B. 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.) b. What are the free cash flows for this project for years 1 and 2? 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 - Data table Sales $ $ $ Operating Expenses Depreciation $ (Click on the following icon in order to copy its contents into a spreadsheet.) EBIT FA $ $ $ $ $ Year 2 Income tax at 21% Unlevered Net Income $ Revenues Operating Expenses (other than depreciation) Depreciation Increase in Net Working Capital Capital Expenditures Marginal Corporate Tax Rate Year 1 129.5 49.2 25.2 2.5 25.9 21 % 151.1 61.6 27.1 8.7 42.4 21 % Print Done