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): Revenues COGS and Operating expenses (other than depreciation) Depreciation Increase in working capital Capital expenditures Corporate tax rate Year 1 106.6 39.3 28.4 5.3 31.1 20% Year 2 151.8 53.4 37.8 7.6 36.1 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? a. What are the incremental earnings for this project for years 1 and 2? The incremental earnings for year 1 is $ million. (Round to one decimal place.) The incremental earnings for year 2 is $ million. (Round to one decimal place.) b. What are the free cash flows for this project for the first two years? The free cash flow for year 1 is 5 million. (Round to one decimal place.) The free cash flow for year 2 is 5 million. (Round to one decimal place.) 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): Revenues COGS and Operating expenses (other than depreciation) Depreciation Increase in working capital Capital expenditures Corporate tax rate Year 1 106.6 39.3 28.4 5.3 31.1 20% Year 2 151.8 53.4 37.8 7.6 36.1 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? a. What are the incremental earnings for this project for years 1 and 2? The incremental earnings for year 1 is $ million. (Round to one decimal place.) The incremental earnings for year 2 is $ million. (Round to one decimal place.) b. What are the free cash flows for this project for the first two years? The free cash flow for year 1 is 5 million. (Round to one decimal place.) The free cash flow for year 2 is 5 million. (Round to one decimal place.)