1. Murugan Inc was founded in 2015. The company lost money each of its first three years but was able to turn a profit in 2018. Murugans operating income (EBIT) for its first four years of operations is reported below. Year EBIT 2015 $ 50,000,000 2016 $150,000,000 2017 $100,000,000 2018 $700,000,000 The company has no debt, so operating income equals earnings before taxes. The corporate tax rate has remained constant at 30%. Assume that the company took full advantage of the carry-back, carry-forward provisions in the Tax Code, and assume that the current provisions were applicable in 2015. How much tax did the company pay in 2018?

$240,000

$280,000

$87,500

$75,000

$105,000