The income tax rate for Hudson Refinery has been 35 percent for each of its 12 years in operation. Company forecasters expect that the much-debated tax reform bill that has been passed by the new Congress this year will decrease Hudson's tax rate to 15 percent. Consider this scenario and address the following: Which rate should the company use? Why?
a) 35 percent, as it has been the historical rate
b) 15 percent, as it is the expected future rate
c) Average of 35 percent and 15 percent
d) Maximum of 35 percent and 15 percent