1. Operating cash flow will increase with a decrease in
A) depreciation expense
B) Current liabilities
C) inventories
D) capital expenditures
2. A & K Co. expects to have earnings before taxes of $250,000 to $300,000. The company's marginal tax rate is 39% and its average tax rate about 33%. For every additional dollar of interest expeense, A & K's taxes will
A) fall by about 33 cents
B) be unaffected
C) fall by 39 cents
D) increase by 39 cents