A company purchased an industrial fork-lift for $75,000 in year 0. The company expects to use it for the next 7 years after which it plans to sell it for $10,000. The estimated gross income and expenses excluding depreciation for the rst year are given below. The fork-lift will be depreciated according to a 5-year MACRS.:Determine the average tax rate applicable in the rst year of operation, using the current corporate tax rate schedule.

A company purchased an industrial fork-lift for $75,000 in year 0. The

1.	A company purchased an industrial fork-lift for $75,000 in year 0. The company expects to use it for the next 7 years after which it plans to sell it for $10,000. The estimated gross income and expenses excluding depreciation for the rst year are given below. The fork-lift will be depreciated according to a 5-year MACRS.:Determine the average tax rate applicable in the rst year of operation, using the current corporate tax rate schedule.
A.	0.1875
B.	0.1731
C.	0.25
D.	0.15
Answer» C. 0.25