For the same increase in interest expense

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Reference no: EM131838291

Grommit Engineering expects to have net income next year of $51.56 million and free cash flow of $25.78 million. Grommit's marginal corporate tax rate is 40 %.

a. If Grommit increases leverage so that its interest expense rises by $ 23.6 million, how will net income change?

b. For the same increase in interest expense, how will free cash flow change.

Reference no: EM131838291

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