Need ASAP

Empire Industries forecasts net income this coming year as shown here(in thousands ofdollars):

See data table.

EBIT $1,000

Interest Expense 0

Income before tax $1,000

Taxes -350

Net Income $650

Approximately $250,000 ofEmpire's earnings will be needed to makenew, positive-NPV investments.Unfortunately, Empire's managers are expected to waste 10% of its net income on needlessperks, petprojects, and other expenditures that do not contribute to the firm. All remaining income will be returned to shareholders through dividends and share repurchases.

a. What are the two benefits of debt financing forEmpire?

b. By how much would each $1 of interest expense reduceEmpire's dividend and sharerepurchases?

c. What is the increase in the total funds Empire will pay to investors for each $1 of interestexpense?

a. What are the two benefits of debt financing forEmpire? (Select the best choicebelow.)

A. Tax and interest cost benefits

B. Interest cost benefits and reducing wasteful investment

C. Dividend and tax benefits

D.Tax benefits and reducing wasteful investment