Use the Information for the Question(s)below

question 31

Multiple Choice

Use the information for the question(s) below.
Fly by Night Aviation (FBNA) expects to have net income next year of $24 million and interest expense of $3 million.FBNA's corporate tax rate is 21%.
-IF FBNA increases leverage so that its interest expense rises by $1 million,then the amount its net income will change is closest to:

• A)-$400,000.
• B)-$600,000.
• C)$400,000.
• D)$600,000.

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Definitions:

Used Truck

A vehicle that has been previously owned and operated, and is available for purchase in the secondary market.

Ancillary Farm

Activities and operations supplementary to a primary farm, often involving processing or selling products directly.

Recover Damages

The process of obtaining financial compensation through legal means for harm or injury suffered.

Fraudulent Misrepresentation

A false statement of material fact made with knowledge of its falsity or reckless indifference, intending to induce another's reliance, resulting in damage.