Your company is considering an expansion of its existing facility for a new product line. The new product will require a $$2\mathrm{.}0$ million investment in equipment that will be depreciated over its economic life $(5$ years$)$ to $$0$ using the straight$-$line method; it is expected that the equipment can be sold for $25\%$ of its initial book value. Expected revenues are $$1,500,000$ for the first year, $$1\mathrm{.}75$ million in year $2,$ $$2\mathrm{.}1$ million in year $3,$ $$2\mathrm{.}0$ million in year $4,$ and $$1\mathrm{.}75$ million in year $5.$ Production costs are initially $65\%$ of sales in year $1$ and will increase by $2\%$ afterwards. The new line will require a one$-$time increase in working capital of $$100,000$ of which is expected to be recovered at the end of the project. The firm$$s tax rate is $35\%$ and the required return for the project is $10\%.$

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How much is the after$-$tax operating income at year $3?$

Less than $$150,000$

Between $$150,000$ and $$250,000$

Between $$250,000$ and $$350,000$

Between $$350,000$ and $$450,000$