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XYZ is evaluating a project that would require the purchase of a piece of equipment...

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Finance

XYZ is evaluating a project that would require the purchase of a piece of equipment for $560,000 today. During year 1, the project is expected to have relevant revenue of $765, 000, relevant costs of $192.000.

and relevant depreciation of $127,000. XYZ would need to borrow $560,000 today to pay for the equipment and would need to make an interest payment of $30,000 to the bank in 1 year. Relevant net

income for the project in year 1 is expected to be $337,000. What is the tax rate expected to be in year 1?

O A rate equal to or greater than 25.32% but less than 29.27%

O A rate equal to or greater than 21.08% but less than 25.32%

O A rate less than 21.08% or a rate greater than 46.38%

O A rate equal to or greater than 29.27% but less than 37.02%

O A rate equal to or greater than 37.02% but less than 46.38%

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