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A Firm Has Interest Expense of $2,500 Each Year for Ten

Question 72

Multiple Choice

A firm has interest expense of $2,500 each year for ten years. If the tax rate is 30% and the discount rate is 7%, compute the value of the interest rate tax shield.


A) $5,744
B) $5,918
C) $5,268
D) $6,987

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