What are the incremental earnings for the project for years

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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):

Problem 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.)

Problem b. What are the free cash flows for this project for years 1 & 2 in millions

revenue yr1 122.2m yr2- 156.9m
operating expense yr1= 46.1m yr2= 64.5m
depreciation yr1 = 26.7m yr2 = 40.8m
increase NWC yr1 = 3.8m yr2 = 8.8m
C. expenditure yr1 = 25.2m yr2 = 44.3m
M corporate tax yr1 = 21% yr2 = 21%
Incremental earnings forecast in millions

Reference no: EM132956198

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