The HamOnt Orchestra is considering replacing its sound equipment. The equipment would cost $900,000 and lower hydro costs by an estimated $250,000 a year. The equipment will belong in a 25% CCA class. The required rate of return is 10% and the tax rate is 30%. What is the increase in net income in the second year from this proposed project?

a) $76,252

b) $59,500

c) $48,267

d) $37,188 is correct. Please show the solution in excel and explain.

e) $96,250