Require the purchase of piece of equipment

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Gomi Waste Disposal is evaluating a project that would require the purchase of a piece of equipment for 129,000 dollars today. During year 1, the project is expected to have relevant revenue of 100,000 dollars, relevant costs of 40,000 dollars, and relevant depreciation of 18,000 dollars. Gomi Waste Disposal would need to borrow 129,000 dollars today to pay for the equipment and would need to make an interest payment of 8,000 dollars to the bank in 1 year. Relevant net income for the project in year 1 is expected to be 27,313 dollars. What is the tax rate expected to be in year 1? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Reference no: EM132018129

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