In recent years, Haverhill Corporation has averaged a net income of $10 million per year on net sales of $100 million pe

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answerhappygod
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In recent years, Haverhill Corporation has averaged a net income of $10 million per year on net sales of $100 million pe

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In recent years, Haverhill Corporation has averaged a net income
of $10 million per year on net sales of $100 million per year. It
cur-rently has no long-term debt, but is considering a debt issue
of $5million. The interest rate on the debt would be 6 percent.
Haverhillcurrently faces an effective tax rate of 35 percent. What
would beHaverhill’s annual interest tax shield if it goes through
with the debt issuance?
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