Empire Industries forecasts net income this coming year as shown below (in thousands of dollars): $1,000 EBIT Interest expense Income before tax Taxes Net income 1,000 - 350 650 Approximately $250,000 of Empire's earnings will be needed to make new, positive-NPV investments. Unfortunately, Empire's managers are expected to waste 10% of its net income on needless perks, pet projects, and other expenditures that do not contribute to the firm. All remaining income will be distributed to shareholders. a. What are the two benefits of debt financing for Empire? b. By how much would each $1 of interest expense reduce Empire's distributions to shareholders? a. What are the two benefits of debt financing for Empire? O A. Interest cost benefits and reducing wasteful investment OB. Tax and interest cost benefits O C. Dividend and tax benefits OD. Tax benefits and reducing wasteful investment b. Each $1 of interest expense would reduce Empire's distributions to shareholders by $ (Round to three decimal places.) c. The increase in the total funds Empire will pay to investors for each $1 of interest expense is $ (Round to three decimal places.)