Question
Platinum Water Packaging is evaluating the ice cream parlor project. During year 1, the ice cream parlor project is expected to have relevant revenue of
Platinum Water Packaging is evaluating the ice cream parlor project. During year 1, the ice cream parlor project is expected to have relevant revenue of 889,900 dollars, relevant variable costs of 331,300 dollars, and relevant depreciation of 98,600 dollars. In addition, Platinum Water Packaging would have one source of fixed costs associated with the ice cream parlor project. Platinum Water Packaging just signed a deal with Green Forest Consulting to develop an advertising campaign for use in the project. The terms of the deal require Platinum Water Packaging to pay Green Forest Consulting either 63,100 dollars in 1 year if the project is pursued or 91,300 dollars in 1 year if the project is not pursued. Relevant net income for the ice cream parlor project in year 1 is expected to be 400,763 dollars. What is the tax rate expected to be in year 1? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
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