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Interest payment due to debt can be burdensome to businesses. If interest payment is too high, it will have a negative impact on earnings before tax....

  1. Interest payment due to debt can be burdensome to businesses. If interest payment is too high, it will have a negative impact on earnings before tax. However, interest payment can also reduce tax obligation of a company. Using an example, explain how interest payment on short-term and long-term debt can reduce the amount of taxable income of a firm.

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The long term and short term duration on interest payment and interest expenses always have impact on the interest expense... View the full answer

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