XYZ has Sale s= 4,000, COGS = 2,000, Depreciation = 400, Interest = 600. The tax rates are:10% for taxable income up to 500, 15% for the next 500,…

XYZ has Sale s= 4,000, COGS = 2,000, Depreciation = 400, Interest = 600. The tax rates are:10% for taxable income up to 500, 15% for the next 500, and 20% for any taxable income above 1,000 1. What is XYZ’s Interest Tax Shield (ITS)? A. 90 B.  120 C. 85 D. none of the above

. What would be the ITS if depreciation is increased to 1,000?. What would be the ITS if depreciation is increased to 1,000?