Question: XYZ is evaluating a project that would require the purchase of a piece of equipment for $450,000 today. During year 1, the project is expected

XYZ is evaluating a project that would require the purchase of a piece of equipment for $450,000 today. During year 1, the project is expected to have relevant revenue of $771,000, relevans and relevant depreciation of $127,000. XYZ would need to borrow $450,000 today to pay for the equipment and would need to make an interest payment of $20,000 to the bank in 1 year. income for the project in year 1 is expected to be $343,000. What is the tax rate expected to be in year 1?

A) A rate equal to or greater than 36.01% but less than 48.56%

B) A rate less than 20.67% or a rate greater than 48.56%

C) A rate equal to or greater than 26.87% but less than 36.01%

D) A rate equal to or greater than 23.46% but less than 26.87%

E) A rate equal to or greater than 20.67% but less than 23.46%

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