The Koi Fish Corporation expects to have sales of $$13$ million. Costs other than depreciation are expected to be $75\%$ of sales, and

depreciation is expected to be $$1\mathrm{.}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 $22\%($ignore any possible state corporate taxes$).$ Koi Fish Corp has no debt.

a$)$ What is Koi Fish's expected net income?

b$)$ What is Koi Fish's expected net cash flow?

Suppose Congress changed the tax laws so that Koi Fish's depreciation expenses doubled. No changes in operations occurred.

c$)$ What is the net cash flow if depreciation expenses are doubled?

Now suppose that Congress changed the tax laws such that, instead of doubling Koi Fish's depreciation, it was reduced by $50\%.$

d$)$ What is the net cash flow if depreciation expenses are halved?

e$)$ If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved?