Your company is taking the loan of $1,260,000 for a new business plan. The interest rate is set at 6%. The entire debt must be paid in 5 years in an annuity payment plan. The Present Value Interest Factor for an Annuity (PVIFA at 6% interest rate for 5 years) is 4.2000.

1). You want to find out whether your operations are strong enough to handle the interest payments on this loan. Provide the title of the account to examine inside the document you answered in the previous question?

a) Eanrings before interest and taxes (EBIT)

b) Net Profit

c) Cash Flows from the Operating Activities

d) Cash Account

2). If your companys Tax Rate is 40%, what is the Real Interest Rate (=After-tax interest Rate) when tax-saving is realized? (Present your answer to the first decimal as in #. #). Please do not put "%" in your answer. Just put the number (for example, provide 1.0 for 1.0%)