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 2 155.8 Revenues 129.9 COGS and Operating Expenses (other than depreciation) Depreciation Increase in Net Working Capital Capital Expenditures 32.5 51.8 22.5 34.8 2.1 7.7 27.7 39.2 Marginal Corporate Tax Rate 35% 35% 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 $ Sales $ Operating Expenses $ Depreciation $ EBIT $ Income tax at 35% $ Unlevered Net Income