Shepard Industries is evaluating a proposal to expand its current distribution facilities.

Management has projected the project will produce the following cash flows for the first two

years $($in millions$).$

Year $12$

Revenues $12001400$

Operating Expense $450525$

Depreciation $240280$

Increase in working

capital $6070$

Capital expenditures $300350$

Marginal corporate tax

rate $30\%30\%$