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 Net Working Capital Capital Expenditures Marginal Corporate Tax Rate Year 1 129.9 39.6 20.9 3.6 29.3 Year 2 157.6 68.1 31.6 7.9 36.6 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.) Year 1 Year 2 Incremental Earnings Forecast (millions) Sales $ $ $ $ Operating Expenses Depreciation EBIT $ $ $ $ Income tax at 35% $ Unlevered Net Income $ Enter any number in the edit fields and then continue to the next question. ? b. What are the free cash flows for this project for years 1 and 2? Calculate the free cash flows of this project below: (Round to one decimal place.) Free Cash Flow (millions) Year 1 Year Unlevered Net Income $ $ Depreciation Capital Expenditure $ Change in NWC $ Free Cash Flow FA $