cascade industries has the following account balances current assets 30000/

/in /by

b. Assume that after the funds are invested, EBIT amounts to $18,000. Also assume the company pays $5,000 in dividends or $5,000 in interest, depending on which source of financing is used. Based on a 30 percent tax rate, determine the amount of the increase in retained earnings that would result under each financing option.