Smith Industries Is in Desperate Need of a New Press

Multiple Choice

Smith Industries is in desperate need of a new press machine for their production department. The manager has been asked to select the most favorable option while keeping in mind that any decision made may also impact their department's evaluation. Given this, the manager knows that performing a thorough analysis is crucial. A machine could be purchased from Grove Inc. for a total cost of $9,677 and would generate Operating Income of $3,705. A different machine could be purchased from Forest Inc. for a total cost of $9,003 and would generate Operating Income of $3,432. The company has provided the following information: What is the tax rate for the press machine from Grove? Assume the company uses an effective tax rate that is rounded to the four places. (Do not round intermediate calculations.)

A) 12.34%
B) 14.66%
C) 17.84%
D) 18.62%