Question: 4. The income statement for E.C. Builders (ECB) is shown below. Given its marginal corporate tax rate of 35%, what is the amount of the

4. The income statement for E.C. Builders (ECB) is shown below. Given its marginal corporate tax rate of 35%, what is the amount of the interest tax shield for ECB in years 2010 through 2013? Calculate the present value of the tax shield, assuming that the interest rate of debt is 7%. 2010 3369 -2359 2011 3706 -2584 2012 4077 -2867 2013 4432 -3116 -248 -226 -22 -25 ECB Income Statement ($M) Total Sales Cost of Sales Administrative Exp. Depreciation Operating income Other income EBIT Interest expense Income before tax Taxes (35%) Net Income 762 849 8 857 -276 -27 907 10 917 -100 817 -286 531 769 -50 719 -252 467 -299 -29 988 12 1000 -100 900 -315 -80 777 -272 505 585

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