Butterfly tractors had $14 million in sales last year. cost of goods sold was $8.00 million, depreciation expense was $2 million, interest payment on outstanding debt was $1 million, and the firm's tax rate was 35%.

a. what was the firm's net income?

The net income is $1.95 million, this is how we calculate this;

Sales last year is $14 million

Goods sold cost = $8 million

Depreciation expense = $2 million and debt is $1 million.

So the amount left = $14 million - ($8million + $2 million + $1 million) = 14 - 11 = 3 million

tax rate is 35 %, so 35% of 3 million = 0.35 x 3 = $1.05 million

Net income = $3 million - $1.05 million = $1.95 million