COGS and Operating Expenses (other than depreciation)
46.1
54.5
Depreciation
24.9
32.9
Increase in Net Working Capital
2.8
8.2
Capital Expenditures
29.2
38.4
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?
Answer & Explanation
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