What were the firms net incomes and cash flows

Assignment Help Cost Accounting
Reference no: EM13549016

Profits versus Cash Flow. Butterfly Tractors had $14 million in sales last year. Cost of goods sold was S8 million, depreciation expense was $2 million, interest payment on outstanding debt was $1 million, capital expenditures were $1 million, and the firn's tax rate was 35 percent.

a. What were the firm's net incomes? Cash flows from operations, and cash flow from assets?.

b. What would happen to net income and cash flows if depreciation were increased by $1 million? How do you explain the differing impact of depreciation on income versus cash flow?

c. Would you expect the change in income and cash flows from the change in depreciation to have a positive or negative impact on the firm's stock price?

d. Now consider the impact on net income and cash flow if the firm s interest expense were $1I million higher. Why is this case different from part (b)?

Reference no: EM13549016

Questions Cloud

Prepare a statement of retained earnings for year : Messer Company had retained earnings at the beginning of the current year of $590,000. During the year, the following activities occurred - Prepare a statement of retained earnings for the year.
Evaluate the percentage of sugar preset in 12.00 g of mike : Given that a 12.00 g milk chocolate bar cotains 9.200 g of sugar, calculate the percentage of sugar preset in 12.00 g of mike chocolate. express your aswer numerically
An electron in an atom has an orbital angular momentum : An electron in an atom has an orbital angular momentum with ml = 0. What is the component morb,z? (J*s) What is the component ?orb,z? (J/T) If an atom is in an external magnetic field B of magnitude 45 mT and directed along the z-axis, what is the..
Estimate how far up the plane does the ball go : A solid spherical ball of mass 2.74 kg and radius 0.15 m rolls along a smooth, level surface with a speed of 2 m/s. How far up the plane does the ball go
What were the firms net incomes and cash flows : What were the firms net incomes and cash flows from operations, and cash flow from assets - Would you expect the change in income and cash flows from the change in depreciation
Determine the de broglie wavelength of the neutrino : Suppose a neutrino is created and has an energy of 49.0 MeV. (a) Assuming the neutrino, like the photon, has no mass and travels at the speed of light, find the momentum of the neutrino. (b) Determine the de Broglie wavelength of the neutrino.
Obtain what is the tension in the support cable : A sign weighing 498 N is suspended at the end of a uniform rod 4.04 m long weighing 663 N as shown below. What is the tension in the support cable
To strengthen his arm and chest muscles : To strengthen his arm and chest muscles, an 75.0 kg athlete 2.00 m tall is doing a series of push-ups as shown in the figure below . His center of mass is 1.20 m from the bottom of his feet, and the centers of his palms are 30.0 cm from the top of..
Prepare a note disclosure relating to incident : Counsel believes that the homeowner's case is much weaker and will be decided in favor of Welker - Prepare a note disclosure relating to this incident.

Reviews

Write a Review

 

Cost Accounting Questions & Answers

  What amount of equity method income would russell recognize

What amount of equity method income would Russell recognize in 2011 from its ownership interest in Thacker and what is the equity method balance in the Investment in Thacker account at the end of 2011?

  How does each company value its inventory

What is the difference between the 10K, the 10Q and the 8K reports and how does each company value its inventory

  Match each situation with fraud triangle factor opportunity

match each situation with fraud triangle factor opportunity rationalization or financial pressure that best explain

  Prepare a bank reconciliation for laymon boat company

Prepare a bank reconciliation for Laymon Boat Company at September 30 and prepare any adjusting entries necessary as a result of the bank reconciliation.

  Identify the ethical issues involved

Who are the stakeholders in this situation and identify the ethical issues involved in this situation.

  An analysis of insurance policies

The Prepaid Insurance account had a $4,000 balance on 31 st December, 2012. An analysis of insurance policies shows that $1,200 of unexpired insurance benefits remain at 31 st December, 2013.

  Total net cash flow from operating activities

In addition, the income statement showed a gain of $12,500 from the sale of land. Reconcile a net income of $125,000 to net cash flow from operating activities.

  During the year just ended kerry companys income under

during the year just ended kerry companys income under absorption costing was 3000 lower than its income under variable

  Differentiate between cost, profit and investment

Differentiate them between cost, profit, revenue and investment centres and explain how managers of responsibility centres are responsible for the performance of their part of the organization and its activities.

  Case study-image is everything, inc.

Specializes in lithographic duplication, catering to demands from the nouveau riche for reproductions of paintings by artists such as Rembrandt, Picasso, Van Gogh, etc.

  Expense increase or decrease over the life of the bonds

Ziegler Corporation issues $400,000 of 9%, 5-year bonds on January 1, 2012, at 104. If Ziegler uses the effective-interest method in amortizing the premium, will the annual interest expense increase or decrease over the life of the bonds? Explain..

  What are the investments payback period

What are the investment's payback period, IRR, and NPV, assuming the firm's WACC is 9% and if the firm requires a payback period of less than 5 years, should this project be accepted?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd