Crackle Company instituted an aggressive plan to lower its cost of financing over the next decade. Currently

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Crackle Company instituted an aggressive plan to lower its cost of financing over the next decade. Currently Crackle's cost of debt financing is 8%, its cost of equity financing is 14%, and its tax rate is 35%. Crackle currently has $2,500,000 of debt.
Required:
1. Calculate the after-tax cost amount of interest expense.
2. How does the tax effect of interest expense affect financial leverage?
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