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): 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 Sales $ $ Operating Expenses $ Depreciation $ EBIT $ $ $ Income tax at 21% $ $ Unlevered Net Income $ Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 2 Revenues Operating Expenses (other than depreciation) Depreciation Increase in Net Working Capital Capital Expenditures Marginal Corporate Tax Rate Year 1 126.4 36.1 25.5 3.4 27.9 21 % 164.5 53.2 33.7 8.6 39.4 21 % Print Done