Butterfly Tractors had $15.50 million in sales last year. Cost of goods sold was $8.30 million, depreciation expense was $2.30 million, interest payment on outstanding debt was $1.30 million, and the firm’s tax rate was 21%.
a. What was the firm’s net income? (Enter your answers in millions rounded to 2 decimal places.)
b. What was the firm’s 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 $1.30 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 $1.30 million and interest expense was $2.30 million? (Enter your numeric answer in millions rounded to 2 decimal places. Select "unaffected" if the results do not affect the balance.)
please HELP!
(All figures are in millions) | ||||||||
a) | Sales | $ 15.50 | ||||||
Less: | ||||||||
Cost goods sold | $ 8.30 | |||||||
Gross profit | $ 7.20 | |||||||
Depreciation | $ 2.30 | |||||||
Interest | $ 1.30 | |||||||
Income Before Tax | $ 3.60 | |||||||
Tax @ 21% | $ 0.76 | |||||||
Net Income | $ 2.84 | |||||||
b) | Firms cash flow | |||||||
Net Income | $ 2.84 | |||||||
Add: Depreciation | $ 2.30 | |||||||
Firms Cash Flow | $ 5.14 | |||||||
c) | net income and cash flow if depreciation were increased by $1.30 million | |||||||
Sales | $ 15.50 | |||||||
Less: | ||||||||
Cost goods sold | $ 8.30 | |||||||
Gross profit | $ 7.20 | |||||||
Depreciation | $ 3.60 | |||||||
Interest | $ 1.30 | |||||||
Income Before Tax | $ 2.30 | |||||||
Tax @ 21% | $ 0.48 | |||||||
Net Income | $ 1.82 | |||||||
Add: Depreciation | $ 3.60 | |||||||
Cash Flow | $ 5.42 | |||||||
d) & e | No question | |||||||
f) | ash-flow if depreciation was $1.30 million and interest expense was $2.30 million | |||||||
Sales | $ 15.50 | |||||||
Less: | ||||||||
Cost goods sold | $ 8.30 | |||||||
Gross profit | $ 7.20 | |||||||
Depreciation | $ 1.30 | |||||||
Interest | $ 2.30 | |||||||
Income Before Tax | $ 3.60 | |||||||
Tax @ 21% | $ 0.76 | |||||||
Net Income | $ 2.84 | |||||||
Add: Depreciation | $ 1.30 | |||||||
Cash Flow | $ 4.14 | |||||||
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