Butterfly Tractors had $24.00 million in sales last year. Cost of goods sold was $10.00 million, depreciation expense was $4.00 million, interest payment on outstanding debt was $3.00 million, and the firm's tax rate was 35%.
a. What was the firm's net income and net cash flow?
b. What would happen to net income and cash flow if depreciation were increased by $3.00 million?
c. What would be the impact on net income and cash flow if the firm's interest expense were $3.00 million higher.