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Grommit Engineering expects to have net income next year of $36.15 illion and free cash flow of $22.35 million. Grommit's marginal corporate tax rate is

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Grommit Engineering expects to have net income next year of $36.15 illion and free cash flow of $22.35 million. Grommit's marginal corporate tax rate is 35%. a. If Grommit increases leverage so that its interest expense rises by $5.6 million, how will net income change? b. For the same increase in interest expense, how will free cash flow change? All Q a. If Grommit increases leverage so that its interest expense rises by $5.6 million, how will net income change? Net income will fll to S million. (Round to two decimal places ) b. For the same increase in interest expense, how will free cash flow change? (Select the best choice below.) O A. Free cash flow decreases by the amount of the interest expense. O B. Free cash flow is not affected by interest expense. O C. Free cash flow increases by the amount of the interest expense. O D. None of the above

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