Barnett Corporation anticipates net income of $1,200,000 this year. The company is considering signing an equipment lease that would result in a $175,000 deductible expense this year. The company’s tax rate is 35 percent.

Required
A. What are the tax expense and net income after taxes for the anticipated net income without the lease of the equipment?
B. What are the tax expense and net income after taxes if the equipment is leased?