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Grommit Engineering expects to have net income next year of $20.13 million and free cash flow of $10.07 million. Grommit's marginal corporate tax rate is
Grommit Engineering expects to have net income next year of $20.13 million and free cash flow of $10.07 million. Grommit's marginal corporate tax rate is 21%. a. If Grommit increases leverage so that its interest expense rises by 3.5 million, how will net income change? b. For the same increase in interest expense, how will free cash flow change?
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