8. Assume South Sea Baubles, Inc. (the company in the prior question) neither issued nor retired any shares in 2014 and that its current portion of long-term debt remained unchanged in 2014 relative to the prior year. Construct SSBs cash flow statement and answer the following:

a) What were SSBs net cash flows from operations for 2014?

b) What were SSMs net cash flows from investment activities in 2014?

c) What were SSBs net cash flows from financing activities in 2014?

9. Butterfly Tractors had $14 million in sales last year. Cost of goods sold was $8 million, depreciation expense was $2 million, interest payment on outstanding debt was $1 million, and the firms tax rate was 35%. a) What were the firms net income and net cash flows from operations? Assume no change in net working capital. b) What would happen to the firms net income and cash flows from operations if, by accelerating depreciation expense, the firm had been able to increase it depreciation expense by $1 million? c) Knowing that shareholders preference for cash, would you expect the two changes you identified in b) to have a positive or negative impact on the companys stock price? d) What would be the impact on net income if depreciation was $1 million and interest expense was $2 million? e) What would be the impact on cash if depreciation was $1 million and interest expense was $2 million?