eBook Problem 2-11 Income and Cash Flow Analysis The Ber dt Corporation expects to have sales o $13 million. Costs other than depre abon are expected to be B % of sales and depreciation is expected to be si muon Sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year Brendt's federal-plus-state tax rate is 35% Be de has no debt a. Set up an income statement. What is Berndt's expected net income? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000 What is Berndt's expected net cash flow? Enter your answer in dollars. For example, an answer of $1.2 milion should be entered as 1.200,000. b. Suppose Congress changed the tax laws so that Berndt's depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to n cash fiow? Select I. If depreciation doubled, taxable income would fall to zero, taxes would be zero, and net cash flow would decline II. If depreciation doubled, taxable income would not be offected since deoreciation and amortization are non-cash expenses. Net cash flow would also be unaffected III. If depreciation doubled, taxable income would not be affected since depreciation and amortization are non-cash expenses. Net cash flow would double IV. If depreciation doubled, taxable income would fail to zero, taxes would be zero, and net cash fow would be unaffected V. If depreciation doubled, taxable income would fall to zero, taxes would be zero, and net cash flow would nse