Question: XYZ is evaluating the claw machine project. During year 1, the claw machine project is expected to have relevant revenue of $95,000, relevant variable costs

XYZ is evaluating the claw machine project. During year 1, the claw machine project is expected to have relevant revenue of $95,000, relevant variable costs of $35,000, and relevant depreciation of $0. In addition, XYZ would have one source of fixed costs associated with the claw machine project. Yesterday, XYZ signed a deal with Ruby Marketing to develop a marketing campaign for use in the project. The terms of the deal require XYZ to pay Ruby Marketing either $15,000 in 1 year if the project is pursued or $20,000 in 1 year if the project is not pursued. Relevant net income for the claw machine project in year 1 is expected to be $31,000. What is the tax rate expected to be in year 1?

	a.	A rate less than 40.00% or a rate equal to or greater than 60.00%
	b.	A rate equal to or greater than 40.00% but less than 45.00%
	c.	A rate equal to or greater than 45.00% but less than 50.00%
	d.	A rate equal to or greater than 50.00% but less than 55.00%
	e.	A rate equal to or greater than 55.00% but less than 60.00%

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