1. Operating chas flow will increase with a decrease in

A) depreciation expense

B) Current liabilities

C) inventories

D) capital expenditures

2. A & K Co. expects to have earnings before taxes of $250,000 to $300,000. The company's marginal tax rate is 39% and its average tax rate about 33%. For every additional dollar of interest expeense, A & K's taxes will

A) fall by about 33 cents

B) be unaffected

C) fall by 39 cents

D) increase by 39 cents