1. Sheppard industries evaluating a proposal expand current distribution facilities. Management projected produce cash flows 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 30% 30%
The incremental unlevered net income Sheppard Industries in year one is closet to
1. $600 2. $ 510 3. $415 4.$355