Grommit Engineering expects to have net income next year of $$20\mathrm{.}75$ million and free cash flow of $$22\mathrm{.}15$

million. Grommit$$s marginal corporate tax rate is $35\%.$

a$.$ If Grommit increases leverage so that its interest expense rises by $$1$ million, how will its net income

change?

b$.$ For the same increase in interest expense, how will free cash flow change?.... this question is based on modiglani and miller