. Please use the selected data in Exhibit 1 for the Samuels Corporation.

Exhibit 1: Selected Data for Samuels Company (US dollar millions)

Year 3 Year 2 Year 1 Equipment value for accounting purposes

(carrying amount) (depreciation of USD1,000/

year)

USD7,000 USD8,000 USD9,000 Equipment value for tax purposes (tax base)

(depreciation of USD1,429/year)

USD5,714 USD7,143 USD8,571 Assuming a 35 percent tax rate and the selected data below for the Samuels Company, the company’s deferred tax liability in Year 3 is closest to:

A. USD450.

B. USD750.

C. USD900.