(Computing interest taxsavings)

(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)?

c.What are the firm’s interest tax savings?

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