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 21%.

A. What was the firms net income?

B. What was the firms cash flow?

C. What would happen to net income and cash flow if depreciation were increased by $1 million?

D. Would you expect the change in depreciation to have a positive or negative impact on the firm's stock price?

E. What would be the impact on net income if depreciation was $1 million, and the interest expense was $2 million?

F. What would be the impact on cash flow if depreciation was $1 million and interest expense was $2 million?