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XYZ is evaluating a project that would require the purchase of a piece of equipment for. $410,000 today. During year 1, the project is expected
XYZ is evaluating a project that would require the purchase of a piece of equipment for. $410,000 today. During year 1, the project is expected to have relevant revenue of $755,000, relevant costs of $199,000, and
relevant depreciation of $139,000. XYZ would need to borrow $410,000 today to pay for the equipment and would need to make an interest payment of $23,000 to the bank in 1 year. Relevant net income for the project
in year 1 is expected to be $337,000. What is the tax rate expected to be in year 1?
O A rate less than 16.43% or a rate greater than 55.28%
- O A rate equal to or greater than 16.43% but less than 19.74%
O A rate equal to or greater than 34.25% but less than 55.28%
O A rate equal to or greater than 22.02% but less than 34.25%
O A rate equal to or greater than 19.74% but less than 22.02%
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