Determine the companys effective tax rate by dividing its income taxes by its income before tax in 2022.

The company is considering developing a new own-brand range of carbon-neutral dairy products for customers in the Coles Supermarkets division. If the company would decide to go ahead with the project, the development of the new products will initially require an initial capital expenditure equal to 5% of Coles net property, plant, and equipment (PPE), as per the financial year ended 30 June 2022. The project will then require an additional investment equal to 35% of the initial investment after the first year of the project. Assume that the company will fully depreciate these assets by the straight-line method over a ten-year life. At the end of the project, these assets can be sold at an expected residual value of 7% of their original values. The company will need to take out a loan of $100 million to (partly) finance this project, at an interest rate of 6% per annum. The loan will be an interest only loan, with the capital to be paid back at the end of the project.

The project will require additional net working capital (NWC) of about 10% of the first-year revenues of the project. This investment in NWC will be made at the beginning of the project. In addition, further investment of $10,000,000 in NWC will be required at the beginning of each subsequent year. The project also requires staff to be specially trained to use a new equipment; fortunately, a similar equipment was purchased a year ago, and at that time the staff went through the $500,000 training program needed to familiarise themselves with the type of equipment. The companys management is uncertain whether to charge half of this $500,000 training fee to the project.

The company has recently completed a two-year market study, costing $400,000, to assess the potential popularity of the new products. The companys management is uncertain whether to charge the cost of this market study to the new project. Based on the results of the study, they have estimated that the new project is expected to run for six years, and after that point the project will be retired. The first-year revenues for the new products are expected to be 2% of the companys total revenue for the financial year ended 30 June 2022. The revenues of the new products are expected to grow at 45% for the second year then 10% for the third, and after that decline by 5% annually for the final years of the projects expected life. Your team will have to determine the rest of the cash flows associated with this proposed project. The CFO of the company has indicated that it would be reasonable to expect that the operating costs of this project will be of similar proportion relative to the revenues as the companys existing products.