As a member of UA Corporation's financial staff, you must estimate the Year 1 cash flow for a proposed project with the following data. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. What is the Year 1 cash flow?

Sales revenues, each year $54,600

Operating costs $15,000

Interest expense $4,000

Tax rate 25.0%

a. $33,700

b. $29,700

c. $30,700

d. $26,700

e. $39,600