# Question: Elmdale Enterprises is deciding whether to expand its production facilities

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):

a. What are the incremental earnings for this project for years 1 and 2?

b. What are the free cash flows for this project for the first twoyears?

a. What are the incremental earnings for this project for years 1 and 2?

b. What are the free cash flows for this project for the first twoyears?

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