A firm has a project using equipment purchased with a loan. The analysis period is year 2 of the project. The BTCF (excluding loans) is $250,000 in t = 0 dollars. Depreciation is $35,000. The loan has $30,000 in principal repayments and $10,000 in interest payments. Inflation is 5% per year. The marginal tax rate is 21%. What is the tax amount?

Answer choices:

a. $42,131

b. $43,050

c. $44,321

d. $48,431