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Given the following information for a levered and unlevered firm, calculate the difference in the cash flow available to investors. Assume the corporate tax rate
Given the following information for a levered and unlevered firm, calculate the difference in the cash flow available to investors. Assume the corporate tax rate is percent.
Hint: Calculate the tax savings arising from the tax deductibility of interest payments
Levered Unlevered
Revenue $ $
Operating cost $ $
Interest expense $ $
Group of answer choices
$
$
$
$
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