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.) b. What are the free cash flows for this project for years 1 and 2?

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.) b. What are the free cash flows for this project for years 1 and 2?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...

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Question

HELP ME

Revenues
COGS and Operating Expenses (other than depreciation)
Depreciation
Increase in Net Working Capital
Capital Expenditures
Marginal Corporate Tax Rate
Sales
Operating Expenses
Depreciation
EBIT
Income tax at 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.)
b. What are the free cash flows for this project for years 1 and 2?
ww.pensww.j
Calculate the incremental earnings of this project below: (Round to one decimal place.)
Incremental Earnings Forecast (millions)
Unlevered Net Income
40
$
$
GA
$
$
Year 1
Year 1
122.3
43.2
21.1
2.6
28.3
35%
Enter any number in the edit fields and then click Check Answer.
Year 2
168.4
63.8
37.3
7.8
43.5
35%

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