Elmdale Enterprises is deciding whether to expand its production facilities. Although long-term cash flows are difficult...
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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): Revenues COGS and Operating expenses (other than depreciation) Depreciation Increase in working capital Capital expenditures Corporate tax rate 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 two years? a. What are the incremental earnings for this project for years 1 and 2? The incremental earnings for year 1 is $ Year 1 111.8 43.7 28.3 5.1 34.1 20% million. (Round to one decimal place.) The incremental earnings for year 2 is $ b. What are the free cash flows for this project for the first two years? The free cash flow for year 1 is $ million. (Round to one decimal place.) The free cash flow for year 2 is $ million. (Round to one decimal place.) Enter your answer in each of the answer boxes. million. (Round to one decimal place.) Year 2 160.7 64.7 33.3 8.5 44.2 20% ? 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): Revenues COGS and Operating expenses (other than depreciation) Depreciation Increase in working capital Capital expenditures Corporate tax rate 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 two years? a. What are the incremental earnings for this project for years 1 and 2? The incremental earnings for year 1 is $ Year 1 111.8 43.7 28.3 5.1 34.1 20% million. (Round to one decimal place.) The incremental earnings for year 2 is $ b. What are the free cash flows for this project for the first two years? The free cash flow for year 1 is $ million. (Round to one decimal place.) The free cash flow for year 2 is $ million. (Round to one decimal place.) Enter your answer in each of the answer boxes. million. (Round to one decimal place.) Year 2 160.7 64.7 33.3 8.5 44.2 20% ?
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