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A firm has EBIT of $500,000, interest expenses of $300,000, and a cooperate tax rate of 35%. What is its net income? What would its

A firm has EBIT of $500,000, interest expenses of $300,000, and a cooperate tax rate of 35%.

  1. What is its net income?
  2. What would its net income be if it did not have any debt (and, consequently, no interest expense)?
  3. What are the firms interest tax savings?

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