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Elmdale Enterprises is deciding whether to expand its production facilities. Although long-term cash flows are difficult
Posted: Tue Jan 18, 2022 1:01 pm
by answerhappygod
- Elmdale Enterprises Is Deciding Whether To Expand Its Production Facilities Although Long Term Cash Flows Are Difficult 1 (96.94 KiB) Viewed 93 times
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 Year 1 125.0 40.0 25.0 5.0 30.0 20% Year 2 160.0 60.0 36.0 8.0 40.0 20% 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?