Q2 D (20 Marks) A. Please see the table below: All figures are in $ million (10 Marks) Firm A Firm B EBIT 100 100 0 100 Interest 40 Pre-Tax Income 60 Tax 35% of pre-tax ? income Net Income ? ? ? Complete the table and then recalculate the figures assuming that Firm A has to make interest payments of $ 60 Million. a. What happens to taxes paid? b. Does Net Income fall by the additional $20 Million interest payment compared to the figures shown in the table above where interest expense was only $40 Million? B. What is the difference between accounting income and cash flow? Draw a simple Income Statement and a Cash flow format. Which do we need to use when making decisions? (10 Marks)