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Grommit Engineering expects to have net income next year of $1996 miltion and free cash flow of $22.29 miltion. Grommit's marginal corporate tax rate is

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Grommit Engineering expects to have net income next year of $1996 miltion and free cash flow of $22.29 miltion. Grommit's marginal corporate tax rate is 20% a. If Giommit increases veverage so that its Interest expense rlses by $2.2 million, how wit not income change? b. For the same increase in interest expense, how wil free cash flow change? a. If Grommit incteases loverage so that its interest expense rises by $2.2 million, how wilt net income change? Net income will fall tos miltion. (Round to two decimat places.) b. For the same increase in interest expense, how will froe cash flow change? (Select tha best choice below.) A. Free cash flow is not affected by interest expense B. Free cash flow increases by the amount of the interest expense. C. Free cash flow decreases by the amount of the interest expenso. D. None of the above

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