d. What would you recommend that the firm do? Why? 2. CH Corporation is considering expanding its operations to increase its income. To make a final decision they have to calculate the corporate tax consequences. Actually CH Corp. and EBIT of $200,000 annually and has no debt outstanding. Expanding operations would allow the firm to increase its yearly income to $350,000. CH Corp can use either cash reserves or debt to finance its expansion. If the firm uses debi, il will have an interest expense of $70,000 yearly Instructions: Conduct a tax analysis for CH Corp and determine the following: a. What is CH Corp's current annual corporate tax liability? b. What is CH Corp current average tax rate? c. ICH Corp finances its expansion using cash reserves, what will be its new corporate tax liability and average tax rate? d. If CH Corp finances its expansion using debt, what will be its new corporate tax liability and average tax rate