P1-11 Hemingway Corporation is considering expanding its operations to boost its income, but before making a final decision, it has asked you to calculate the corpo- rate tax consequences of such a decision. Currently, Hemingway generates before tax yearly income of $200,000 and has no debt outstanding. Expanding operations 40 PART ONE Introduction to Managerial Finance would allow Hemingway to increase before-tax yearly income to $350,000. way uses debt, it will have a yearly interest expense of $70,000. Create a spreadsheet to conduct a tax analysis (assume a 21% flat tax rately Hemingway Corporation and determine the following: a. What is Hemingway's current annual corporate tax liability? b. What is Hemingway's current average tax rate? c. If Hemingway finances its expansion using cash reserves, what will be its new corporate tax liability and average tax rate? d. If Hemingway finances its expansion using debt, what will be its new corporan tax liability and average tax rate? e. What would you recommend the firm do? Why