1. Euroco is a foreign corporation that manufactures watches for sale worldwide. Euroco markets its watches in the United States through a branch sales office located in Boston. During Year 1, Eurocos effectively connected earnings and profits are $12 million, and its U.S. net equity is $24 million at the beginning of the year, and $16 million at the end of the year. In addition, Eurocos interest expense recorded and paid by the U.S. branch was $1,760,000 of portfolio interest paid to an unrelated foreign corporation and $800,000 of interest paid to a foreign corporation which owns 15% of the combined voting power of Eurocos stock. During Year 2, Eurocos effectively connected earnings and profits are $20 million, and its U.S. net equity at the end of the year is $18 million. In addition, Eurocos U.S. branch had recorded interest paid of $640,000 paid to a U.S. corporation. Euroco is not in a treaty country.

   What is Eurocos branch interest withholding tax obligation, if any, for Year 1?

   	a.	$768,000
   	b.	$240,000
   	c.	$528,000
   	d.	0