Vroomco, a foreign corporation, manufactures motorcycles for sale worldwide. Vroomco markets its motorcycles in the United States through Vroomy, a wholly-owned U.S. marketing subsidiary that derives all of its income from U.S. business operations. Vroomco also has a creditor interest in Vroomy, such that Vroomys debt to equity ratio is 3 to 1, and Vroomy makes annual interest payments of $60 million to Vroomco. The results from Vroomcos first year of operations are as follows:

Sales ............................................................................................... $180 million

Interest income ................................................................................ $6 million

Interest expense (paid to Vroomco)......................................................................................... $60 million Depreciation expense....................................... ............................... ($30 million)

Other operating expenses................................. ............................... ($81 million)

Pre-tax income ................................................. ................................ $15 million

Assume the United States corporate tax rate is 35%, and that the applicable tax treaty exempts Vroomcos interest income from United States withholding tax. Compute Vroomys interest expense deduction.