Question
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
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 firm%u2019s tax rate was 35%
| b. | What would happen to net income and cash flow if depreciation were increased by $1 million? (Input all amounts as positive values. Enter your answers in millions rounded to 2 decimal places.) |
| Net income | by | $ million |
| Cash flow | by | $ million |
| d. | What would be the impact on net income and cash flow if the firm%u2019s interest expense were $1 million higher. (Input all amounts as positive values. Enter your answers in millions rounded to 2 decimal places.) |
| Net income | by | $ million |
| Cash flow | by | $ million |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Venture Capital Valuation
Authors: Lorenzo Carver
1st Edition
0470908289, 978-0470908280
