Assume that the marginal tax rate is as follows:

10% for $0-$10,000

15% for $10,000.01-$25,000

20% for $25,000.01-$50,000

25% for $50,000.01 or more.

Next, assume a business has an EBIT of $10,100 and an interest expense of $0. What would you expect the average tax rate on the ROA to be?

a)

1.50%

b)

10.00%

c)

15.00%

d)

11.50%

e)

10.05%

f)

10.15%