If the firm has earnings before interest and taxes (EBIT) of $105,000, how much taxes should this company pay?

• Sales of 30,000 units/year $6 per unit
• Project costs
• Variable cost per unit is $2
• Fixed costs are $15,000 per year.
• The tax rate is 20%
• Project costs is $30,000.
• Project life is 2 years
• The project has a salvage value of $2,000
• Depreciation is $14,000 per year
• Additional net working capital is $5,000
• The firms required return is 10%.

Select one:

a. $105,000

b. $50,000

c. $21,000

d. $84,000