River Cruises is all-equity-financed with 54,000 shares. It now proposes to issue $290,000 of debt at an interest rate of 10% and to use the proceeds to repurchase 29,000 shares. Suppose that the corporate tax rate is 35%. Calculate the dollar increase in the combined after-tax income of its debtholders and equityholders if profits before interest are: (Do not round intermediate calculations.)

Increase in Cash Flow

a. $79,000

b. $104,000

c. $179,000