If a Corporation Cannot Use Its Interest Payments as a Tax

Multiple Choice

If a corporation cannot use its interest payments as a tax shield for a particular year because it has suffered a loss, it is still possible to use the tax shield because:
I.the carry-back provision allows corporations to carry back the loss and receive a tax refund up to the amount of taxes paid in the previous two years;
II.the carry-forward provision allows corporations to carry forward the loss and use it to shield income in subsequent years

A) I only
B) II only
C) I and II
D) the firm will lose the tax shield