Use the information for the$$ question$($s$)$ below.

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

$1$

$2$

Revenues

$1200$

$1400$

Operating Expense

$450$

$525$

Depreciation

$240$

$280$

Increase in working capital

$60$

$70$

Capital expenditures

$300$

$350$

Marginal corporate tax rate

$21\%$

$21\%$

The free cash flow from the Shepard Industries project in year two is closest$$ to:

Question content area bottom

Part $1$

A$.$

$$$$345$ million

B$.$

$$$$330$ million

C$.$

$$$$455$ million

D$.$

$$$$5$ million