Question: XYZ is evaluating a project that would require the purchase of a piece of equipment for $570,000 today. During year 1, the project is expected

XYZ is evaluating a project that would require the purchase of a piece of equipment for $570,000 today. During year 1, the project is expected to have relevant revenue of $782,000, relevant costs of $193,000, and relevant depreciation of $122,000. XYZ would need to borrow $570,000 today to pay for the equipment and would need to make an interest payment of $29,000 to the bank in 1 year. Relevant net income for the project in year 1 is expected to be $326,000. What is the tax rate expected to be in year 1?

		A rate less than 27.09% or a rate greater than 44.74%
		A rate equal to or greater than 27.09% but less than 31.19%
		A rate equal to or greater than 36.24% but less than 41.77%
		A rate equal to or greater than 31.19% but less than 36.24%
		A rate equal to or greater than 41.77% but less than 44.74%

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