Hexagon Corporation has provided the following information concerning a capital budgeting project: Tax rate Expected life of the project Investment required in equipment Salvage value of equipment 30% 4 $ 64,000 $ 0 $ 195,000 Annual sales Annual cash operating expenses, including variable and fixed expenses One-time renovation expense in year 3 The company uses straight-line depreciation on all equipment. The income tax expense in year 3 is: $ 136,500 $ 24,000