What is our tax bill on this project

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Reference no: EM132065693

Assume we invest $16,000 in a new project that we anticipate will expand sales by 22% over our current level of sales of $600,000. The increase in fixedcosts and variable costs are expected to be 40% of sales. We can depreciate the initial outlay of $160,000 over a five-year period. The company's marginal tax rateis 25%. What is our tax bill on this project?

Reference no: EM132065693

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