The incremental annual taxable income

Reference no: EM13685633

Zeon, a large company has a regular taxable income of $350,000. The company is considering adding some automatic equipment to its production facilities. An investment of $120,000 will produce an initial annual benefit of $89,000 however the benefits are expected to decline $3000 per year. The automatic equipment is considered a MARCS 5-year property class. The annual operating expenses are $15,000. Compute:

1. The incremental annual taxable income for years 1 and 2

2. The incremental annual income tax for years 1 and 2

Reference no: EM13685633

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