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Grommit Engineering expects to have net income next year of $40.76 million and free cash flow of $22.24 million. Grommit's marginal corporate tax rate
Grommit Engineering expects to have net income next year of $40.76 million and free cash flow of $22.24 million. Grommit's marginal corporate tax rate is 35%. a. If Grommit increases leverage so that its interest expense rises by $9.8 million, how will net income change? b. For the same increase in interest expense, how will free cash flow change?
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