Solution-What would be the impact on cash flow

What would be the impact on cash flow

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Question - Butterfly Tractors had $18.00 million in sales last year. Cost of goods sold was $8.80 million, depreciation expense was $2.80 million, interest payment on outstanding debt was $1.80 million, and the firm's tax rate was 21%.

a. What was the firm's net income?

b. What was the firm's cash flow?

c. What would happen to net income and cash flow if depreciation were increased by $1.80 million?

d. What would be the impact on cash flow if depreciation was $1.80 million and interest expense was $2.80 million? (Enter your numeric answer in millions rounded to 2 decimal places. Select "unaffected" if the results do not affect the balance.)

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What would be the impact on cash flow

Reference no: EM132932774

Reference no: EM132932774

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