ABC is analyzing the possible purchase of a bond investment; specifically, which of two investments to buy. The two investments have the same principal, the same terms until maturity, the same interest rate, and the same purchase price. However, A Bonds are exempt municipal bonds issued in Ohio, while B Bonds are issued by a US corporation and are not exempt. ABC classifies all its investments as available for sale (AFS). Which of the two investments will result in the highest taxable income and the highest net operating cash in the first year? Select one:

a. Bonds A higher taxable income and Bonds B higher net operating cash.

b. Bonds A higher taxable income and both equal net operating cash.

c. Bonds B higher taxable income and Bonds A higher net operating cash.

d. Bonds B higher taxable income and both bonds equal net operating cash.