There are two potential investments being considered by John Deere. The first produces $5,000 of tax-exempt income. The second produces income that will be subject to tax at a rate of 20%. Which of the following statements is true regarding Deere's choice?

Group of answer choices

If the second investment generates $7,000 of before-tax income, Casey should choose the second investment.

Both, if the second investment generates $5,800 of before-tax income, Casey should choose the first investment and if the second investment generates $7,000 of before-tax income, Casey should choose the second investment are true.

Casey should always choose the first investment because it minimizes tax costs.

If the second investment generates $5,800 of before-tax income, Casey should choose the first investment.