Question
Butterfly Tractors had $22.50 million in sales last year. Cost of goods sold was $9.70 million, depreciation expense was $3.70 million, interest payment on outstanding
Butterfly Tractors had $22.50 million in sales last year. Cost of goods sold was $9.70 million, depreciation expense was $3.70 million, interest payment on outstanding debt was $2.70 million, and the firms tax rate was 21%
a. What was the firms net income? (Enter your answers in millions rounded to 2 decimal places.)
b. What was the firms cash flow? (Enter your answers in millions rounded to 2 decimal places.)
c. What would happen to net income and cash flow if depreciation were increased by $2.70 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 $2.70 million and interest expense was $3.70 million? (Enter your numeric answer in millions rounded to 2 decimal places. Select "unaffected" if the results do not affect the balance.)
a. Net income million million million b. Net cash flow C. Net income would be Cash flow would be f. Cash flow would be by by million 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