The Berndt Corporation expects to have sales of $12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be $1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. The federal tax rate is 21% (ignore any possible state corporate taxes). Berndt has no debt.

Suppose the values for this problem change to:

Sales 10.2 million

Costs: 74.1% of sales

Depreciation: 1.1 million

Income Tax Rate: 25%

What is net cash flow (not net income) in millions?

If this were your company, what would you prefer Congress to do about depreciation expenses?

		increase depreciation expense
		decrease depreciation expense
		indifferent, does not matter
		depends on the situation