Question
Butterfly Tractors had $18.00 million in sales last year. Cost of goods sold was $8.80 million, depreciation expense was $2.80 million, interest payment on outstanding
Butterfly Tractors had $18.00 million in sales last year. Cost of goods sold was $8.80 million, depreciation expense was $2.80 million, interest payment on outstanding debt was $1.80 million, and the firms tax rate was 21%.
a. What was the firms net income? 3.63 million
b. What was the firms cash flow? 6.43 million
c. What would happen to net income and cash flow if depreciation were increased by $1.80 million? (Enter your numeric answers in millions rounded to 2 decimal places. Select "unaffected" if the results do not affect the balance.)
f. What would be the impact on cash flow if depreciation was $1.80 million and interest expense was $2.80 million? (Enter your numeric answer in millions rounded to 2 decimal places. Select "unaffected" if the results do not affect the balance.)
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