LawnCo and TreeCo operate in the same industry, and both report a 30% effective tax rate. Their book income and current, deferred, and total tax expense are reported below.

ShrubCo is a competitor of both of these companies. Prepare a letter to Laura Collins, VP-Taxation of ShrubCo, outlining your analysis of the other two companies€™ effective tax rates, using only the preceding information. ShrubCo€™s address is 9979 West Third Street, Peru, IN 46970.

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LawnCo $500,000 $200,000 (50,000) 150,000 30% TreeCo $650,000 $ 20,000 175,000 195,000 30% Book income before tax Current tax expense Deferred tax expense (benefit) Total tax expense Effective tax rate