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Emdale Enterprises is deciding whether to expand its production facilities. Although long term cnsh flows are out to estimate, management has projected the following cash now for the first two years in millions of dollars 2. What are the incremental earnings for this project for years 1 and 27 (Note: Assume any incremental cost of goods sold is included as part of b. What are the free cash flows for this project for years 1 and 2? t of operating expenses) 2. What are the incremental earnings for this project for yoan 1 and 2? (No. 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) Sales 5 Operating Expenses 5 $ Depreciation 5 3 Income tax af 21% $ S Year 1 Year 2 $ 5 EBIT 5 $ Unlevered Net Income 5 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 2 Unlevered Net Income $ Depreciation $ Capital Expenditure Change in NWC $ s S Free Cash Flow $ s $ Enter any number in the edit fields and then continue to the next question. (Click on the following icon in order to copy its contents into a spreadsheet.) Revenues Operating Expenses (other than depreciation) Depreciation Increase in Net Working Capital Capital Expenditures Marginal Corporate Tax Rate Year 1 127.6 48.1 27.6 2.1 31.1 21% Year 2 158.3 51.4 36.5 8.1 35.5 21% Print Done ct

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