Question
In: Finance
Problem 3-14 Income versus Cash Flow (LO3) Butterfly Tractors had $15.00 million in sales last year....
Problem 3-14 Income versus Cash Flow (LO3)
Butterfly Tractors had $15.00 million in sales last year. Cost of goods sold was $8.20 million, depreciation expense was $2.20 million, interest payment on outstanding debt was $1.20million, 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.)
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 $1.20 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 $1.20
million and interest expense was $2.20 million? (Enter your
numeric answer in millions rounded to 2 decimal places. Select
"unaffected" if the results do not affect the
balance.)
Solutions
jeff jeffy answered 4 months agoRelated Solutions
Butterfly Tractors had $15.00 million in sales last year. Cost of goods sold was $8.20 million,...
Butterfly Tractors had $15.00 million in sales last year. Cost
of goods sold was $8.20 million, depreciation expense was $2.20
million, interest payment on outstanding debt was $1.20 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...
Butterfly Tractors had $18.00 million in sales last year. Costof goods sold was $8.80 million,...
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? 3.63
millionb. What was the firm’s cash flow? 6.43
millionc. What would happen to net income and cash
flow if depreciation were increased by $1.80 million?(Enter your numeric answers in millions rounded to 2
decimal places. Select "unaffected"...
Butterfly Tractors had $17.50 million in sales last year. Cost of goods sold was $8.70 million,...
Butterfly Tractors had $17.50 million in sales last year. Cost
of goods sold was $8.70 million, depreciation expense was $2.70
million, interest payment on outstanding debt was $1.70million, and
the firm’s tax rate was 30%.
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...
Butterfly Tractors had $21.50 million in sales last year. Cost of goods sold was $9.50 million,...
Butterfly Tractors had $21.50 million in sales last year. Cost
of goods sold was $9.50 million, depreciation expense was $3.50
million, interest payment on outstanding debt was $2.50 million,
and the firm’s tax rate was 30%.
a.
What was the firm’s net income and net cash flow? (Enter
your answers in millions rounded to 2 decimal places. For example,
for $3.92 million, enter "3.92", not "3920000")
Net income
$ million
Net cash flow
$ million
b.
What would happen to net income...
Premium Excavators had $14 million in sales last year. Cost of goods sold was $8 million,...
Premium Excavators had $14 million in sales last year. Cost of
goods sold was $8 million, depreciation expense was $2 million,
interest payments on outstanding debt was $1 million, and the
firm’s tax rate was 21%.
What was the firm’s net income?
What was the firm’s cash flow?
What would happen to net income and cash flow if depreciation
were increased by $1 million?
Would you expect the change in depreciation o have a positive
or negative impact on the...
Problem 3-24 Free Cash Flow (LO3) The following table shows an abbreviated income statement and balance...
Problem 3-24 Free Cash Flow (LO3)
The following table shows an abbreviated income statement and
balance sheet for Quick Burger Corporation for 2016.
INCOME STATEMENT OF QUICK BURGER CORP., 2016
(Figures in $ millions)
Net sales
$
27,575
Costs
17,577
Depreciation
1,410
Earnings before interest and taxes (EBIT)
$
8,588
Interest expense
525
Pretax income
8,063
Taxes
2,822
Net income
$
5,241
BALANCE SHEET OF
QUICK BURGER CORP., 2016
(Figures in $
millions)
Assets
2016
2015
Liabilities and Shareholders' Equity...
Seashell Mfg., Inc. had $750 million of sales last year, and it had $435 million of...
Seashell Mfg., Inc. had $750 million of sales last year, and it
had $435 million of fixed assets that were used at only 65% of
capacity. What is the maximum sales growth rate Seashell could
achieve before it had to increase its fixed assets?
Last year LaCroix Optical had $145 million of sales, and it had $40 million of fixed...
Last year LaCroix Optical had $145 million of sales, and it had
$40 million of fixed assets that were used at 75% of capacity. Use
this information to solve the next two problems.
In millions, by how much could LaCroix Optical sales increase
before it is required to increase its fixed assets?
LaCroix Optical was approached by the Department of Defense
(DoD)because of their ability to manufacture the lens required for
night vision goggles. LaCroix Optical is the last remaining...
Last year LaCroix Optical had $145 million of sales, and it had $40 million of fixed...
Last year LaCroix Optical had $145 million of sales, and it had
$40 million of fixed assets that were used at 75% of capacity. Use
this information to solve the next two problems.
(10 points) In millions, by how much could LaCroix Optical
sales increase before it is required to increase its fixed
assets?
(10 points) LaCroix Optical was approached by the Department of
Defense (DoD)because of their ability to manufacture the lens
required for night vision goggles. LaCroix Optical...
Problem 16-17 Bank Financing The Raattama Corporation had sales of $3.4 million last year, and it...
Problem 16-17
Bank Financing
The Raattama Corporation had sales of $3.4 million last year,
and it earned a 5% return (after taxes) on sales. Recently, the
company has fallen behind in its accounts payable. Although its
terms of purchase are net 30 days, its accounts payable represent
59 days' purchases. The company's treasurer is seeking to increase
bank borrowing in order to become current in meeting its trade
obligations (that is, to have 30 days' payables outstanding). The
company's balance...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- You have been asked by the president of the Farr Construction Company to evaluate the proposed...
- DQ #2 – Consumers & Online Contracts The use of the internet has created the ability...
- You have a 5 mL sample of a protein in 0.5 M NaCl. You place the...
- Which evidence-based counseling theory best supports the client coping with trauma and other mental health issues?...
- Why would a CRM system be beneficial to the supply chain process?
- Use the bond term's below to answer the question Maturity 7 years Coupon Rate 4% Face...
- Aristotle and Kant - then read the following question completely before you begin writing your reply:...
ADVERTISEMENT