Wheelco a foreign corporation manufactures motorcycles for sale worldwide. Whe

Wheelco a foreign corporation manufactures motorcycles for sale worldwide. Wheelco markets its motorcycles in the United States through Wheely a
wholly-owned U.S. marketing subsidiary that derives all of its income from U.S. business operations. Wheelco also has a creditor interest in Wheely
such that Wheely%u2019s debt to equity ratio is 3 to 1 and Wheely makes annual interest payments of $60 million to Wheelco. The results from
Wheely%u2019s first year of operations are as follows:

Assume the U.S. corporate tax rate is 35% and that the applicable tax treaty exempts Wheelco%u2019s interest income from U.S. withholding tax. Compute
Wheely%u2019s interest expense deduction.