A company reports:

Sales of $14,000,

Cash operating costs that 7000

Depreciation of $1,500,

Bonds of $4,000 that carry a 7% interest rate,

An income tax rate of 40%.

1. What is 2020 net income? ______________________

2. If 2021 results are expected to remain unchanged except for depreciation, which is expected to increase by $1,000, how much will net income change in 2021? ______________________