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Last year Tata Technologies reported $10,500 of sales, $6,250 of operating costs other than depreciation, and...

Last year Tata Technologies reported $10,500 of sales, $6,250 of operating costs other than depreciation, and $1,300 of depreciation. The company had no amortization charges, it had $5,000 of bonds that carry a 6.5% interest rate, and its federal-plus-state income tax rate was 35%. This year's data are expected to remain unchanged except for one item, depreciation, which is expected to increase by $750. By how much will Tata’s net income change as a result of the change in its depreciation?

  • A. -487.50

  • B. -511.88

  • C. -463.13

  • D. 1,218.75

  • E. -750.00

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