1. If a corporation cannot use its interest payments as a tax shield for a particular year because it has suffered a loss, it is still possible to use the tax shield because:
3. I)The carry-back provision allows corporations to carry back the loss and receive a tax refund up to the amount of taxes paid in the previous two years.
4. II)The carry-forward provision allows corporations to carry forward the loss and use it to shield income in subsequent years.
5. a.I only
6. b.II only
7. c.I and II
8. d.The firm will lose the tax shield