(Computing interest taxsavings) Dharma Supply has earnings before interest and taxes (EBIT) of $564,000, interest expenses of $278,000, and faces a corporate tax rate of 36 percent.
a.What is Dharma Supply’s net income?
b.What would Dharma’s net income be if it didn’t have any debt(and consequently no interest expense)?
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c.What are the firm’s interest tax savings?