River Cruises is all-equity-financed with 53,000 shares. It now proposes to issue $280,000 of debt at an interest rate of 12% and to use the proceeds to repurchase 28,000 shares. Suppose that the corporate tax rate is 21%. Calculate the dollar increase in the combined after-tax income of its debt-holders and equity-holders if profits before interest are:

Increase in cash flow

A- 78000 =

B-103,000=

C-178,00=