Please help me solve a and b Please help me solve Etobicoke Enterprises is deciding whether

Please help me solve a and b

 

Please help me solve

 

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Etobicoke 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). (Click on the icon located on the top-right corner of the data table below to copy its information into a spreadsheet.) Revenues Year 1 121 Year 2 D 158 Cost of goods sold and Operating Expenses other than depreciation 42 55 Capital cost allowance 28 35 Increase in working capital 5 8 Capital Expenditures Marginal Corporate Tax Rate 31 35% 38 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.) a. Calculate the incremental earnings for Year 1 of this project below. Incremental Earnings Forecast (millions) Sales Operating Expenses CCA EBIT Year 1 Income tax at 35% Unlevered Net Income (Round the final answer to two decimal places. Round all intermediate values to two decimal places as needed.) Etobicoke 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). (Click on the icon located on the top-right corner of the data table below to copy its information into a spreadsheet.) Revenues Year 1 121 Year 2 D 158 Cost of goods sold and Operating Expenses other than depreciation 42 55 Capital cost allowance 28 35 Increase in working capital 5 8 Capital Expenditures Marginal Corporate Tax Rate 31 35% 38 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.) a. Calculate the incremental earnings for Year 1 of this project below. Incremental Earnings Forecast (millions) Sales Operating Expenses CCA EBIT Year 1 Income tax at 35% Unlevered Net Income (Round the final answer to two decimal places. Round all intermediate values to two decimal places as needed.)