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XYZ is evaluating a project that would require the purchase of a piece of equipment for $560,000 today. During year 1, the project is expected
XYZ is evaluating a project that would require the purchase of a piece of equipment for $560,000 today. During year 1, the project is expected to have relevant revenue of $765,000, relevant costs of $196,000, and relevant depreciation of $124,000. XYZ would need to borrow $560,000 today to pay for the equipment and would need to make an interest payment of $40,000 to the bank in 1 year. Relevant net income for the project in year 1 is expected to be $344,000. What is the tax rate expected to be in year 1? O A rate less than 18.20% or a rate greater than 48.06% O A rate equal to or greater than 18.20% but less than 23.82% O A rate equal to or greater than 35.60% but less than 48.06% O A rate equal to or greater than 27.15% but less than 35.60% O A rate equal to or greater than 23.82% but less than 27.15%
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