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Celebrity Food is evaluating the kale crisper project. During year 1 , the kale crisper project is expected to have relevant revenue of $ 4

Celebrity Food is evaluating the kale crisper project. During year 1, the kale crisper project is expected to have relevant revenue of $400,000, relevant variable costs of $125,000, and relevant depreciation of $40,000. In addition, Celebrity Food would have one source of fixed costs associated with the kale crisper project. Celebrity Food just signed a deal with Lights Camera Action to develop an advertising campaign for use in the project. The terms of the deal require Celebrity Food to pay Lights Camera Action either $80,000 in 1 year if the project is pursued or $110,000 in 1 year if the project is not pursued. Relevant net income for the kale crisper project in year 1 is expected to be $200,000. What is the tax rate expected to be in year 1? Answer in decimal format, rounded to the nearest hundredth of a percent (for example, 1.23% would be entered as 0.0123).
What is the net present value of the flier project, which is a 3-year project where Dispersion would spread fliers all over Fairfax? The project would involve an initial investment in equipment of $570,000 today. To finance the project, Dispersion would borrow $570,000. The firm would receive $570,000 from the bank today and would pay the bank $640,000 in 3 years (consisting of an interest payment of $70,000 and a principal payment of $570,000). Cash flows from capital spending would be $0 in year 1, $0 in year 2, and $184,000 in year 3. Operating cash flows are expected to be $215,000 in year 1,-$60,000 in year 2, and $321,000 in year 3. The cash flow effects from the change in net working capital are expected to be $40,000 at time 0; $30,000 in year 1; -$10,000 in year 2, and $20,000 in year 3. The tax rate is 15 percent. The cost of capital is 5.08 percent and the interest rate on the loan would be 3.94 percent.

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