Question: Shepard Industries is evaluating a proposal to expand its current distribution facilities. Management has projected the project will produce the following cash flows for the

Shepard Industries is evaluating a proposal to expand its current distribution facilities.
Management has projected the project will produce the following cash flows for the first two
years (in millions).
Year 12
Revenues 12001400
Operating Expense 450525
Depreciation 240280
Increase in working
capital 6070
Capital expenditures 300350
Marginal corporate tax
rate 30%30%
What is the free cash flow from Shepard Industries project in year one and two?

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