Award: 18 out of 30.00 points

Butterfly Tractors had $20.50 million in sales last year. Cost of goods sold was $9.30 million, depreciation expense was $3.30 million, interest payment on outstanding debt was $2.30 million, and the firms tax rate was 30%.

a.	What was the firms net income and net cash flow? (Enter your answers in millions rounded to 2 decimal places.)

Net income	$ 3.92 million
Net cash flow	$ 7.22 million

net income and net cash flow are the correct answer

b.	What would happen to net income and cash flow if depreciation were increased by $2.30 million? (Input all amounts as positive values. Enter your answers in millions rounded to 2 decimal places.)

Net income	decreased by	$ million
Cash flow	increased by	$ million

d.	What would be the impact on net income and cash flow if the firms interest expense were $2.30 million higher. (Input all amounts as positive values. Enter your answers in millions rounded to 2 decimal places.)

Net income	decreased by	$ million
Cash flow	decreased by	$ million

eBook & Resources

eBook: The Income Statement