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	114.7	152.3
COGS and Operating expenses? (other than? depreciation)	39.2	35.9
Depreciation	25.3	35.5
Increase in working capital	3.53.5	8.48.4
Capital expenditures	33.6	43.4
Marginal corporate tax rate	36%	36%

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?