6
.
Award
:
2
.
00 points
b. What was the firm’s cash flow?
places.)
c. What would happen to net income and cash flow if depreciation were increased by $1.60
million?
Butterfly Tractors had $17.00 million in sales last year. Cost of goods sold was $8.60 million,
depreciation expense was $2.60 million, interest payment on outstanding debt was $1.60million,
and the firm’s tax rate was 35%.
a. What was the firm’s net income? (Enter your answers in millions rounded to 2 decimal
places.)
(Enter your numeric answers in millions rounded to 2 decimal places. Select
"unaffected" if the results do not affect the balance.)
(Enter your answers in millions rounded to 2 decimal
Net income
Net cash flow
$
$ 5.33 million
2.73 million
Hint #1
rev: 08_30_2017_QC_CS-97308, 09_09_2017_QC_CS-99196, 09_12_2017_QC_CS-99470
f. What would be the impact on cash flow if depreciation was $1.60 million and interest expense
was $2.60 million? (Enter your numeric answer in millions rounded to 2 decimal places.
Select "unaffected" if the results do not affect the balance.)
Cash flow would be
Net income would be
Cash flow would be
unaffected
decreased
increased
by
by
by
$
$
$
1.04 million
0.60 million
0.00 million
Hints
