1. ) Discuss MM Proposition I and MM Proposition II (definition, assumptions, results and implications)?

Year	2006	2005	2004
Total Sales	60,553	56,434	53,791
Cost of goods sold	45,565	42,140	39,637
Selling, general & admin expenses	11,688	12,191	11,575
Depreciation	1265	1256	1209
Operating Income	2035	847	1370
Other Income	0	0	0
EBIT	2035	847	1370
Interest expense	510	557	604
Earnings before tax	1525	290	766
Taxes (35%)	534	102	268
Net Income	991	189	498 which year does Kroger Incorporation have the highest tax shield and why?