Butterfly Tractors had $14 million in sales last year. Cost of goods sold was $8 million, depreciation
Question:
a. What were the firm's net income and net cash flow?
b. What would happen to net income and cash flow if depreciation were increased by $1 million?
c. Would you expect the change in income and cash flow to have a positive or negative impact on the firm's stock price?
d. What would be the impact on net income if depreciation was $ 1 million and interest expense was $2 million?
e. What would be the impact on cash if depreciation was $1 million and interest expense was $2 million?
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a Sales mil 1400 million Cost of goods sold 800 Interest expense 100 Depreciation expense 200 Taxabl...View the full answer
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Question Posted:
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