7. 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 $770,000, relevant costs of $191,000, and relevant

depreciation of $129,000. XYZ would need to borrow $560,000 today to pay for the equipment and would need to make an interest payment of $21,000 to the bank in 1 year. Relevant net income for the project in year 1

is expected to be $331,000. What is the tax rate expected to be in year 1?

O A rate equal to or greater than 31.85% but less than 38.76%

O A rate equal to or greater than 27.09% but less than 31.85%

O A rate less than 24.11% or a rate greater than 44.36%

O A rate equal to or greater than 24.11% but less than 27.09%

O A rate equal to or greater than 38.76% but less than 44.36%