WHy A$?$Consider the following excerpts from the income statement and tax returns of Rashford Inc.

$*$Warranty expenditures are tax deductible when payments are made to fulfil the warranty.

The statutory tax rate is $21\%.$ There are no temporary or permanent differences other than the ones

listed in the table. The effective tax rate of Rashford Inc. is:

a$.22\mathrm{.}4\%$

b$.19\mathrm{.}6\%$

c$.23\mathrm{.}38\%$

d$.17\mathrm{.}92\%$

e$.$ None of the above

ANSWER: A