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Question 8) Orange Valley Health is evaluating a project that would require the purchase of a piece of equipment for 770,000 dollars today. During year
Question 8)
Orange Valley Health is evaluating a project that would require the purchase of a piece of equipment for 770,000 dollars today. During year 1, the project is expected to have relevant revenue of 805,400 dollars, relevant costs of 361,900 dollars, and relevant depreciation of 90,100 dollars. Orange Valley Health would need to borrow 770,000 today for the equipment and would need to make an interest payment of 20,700 dollars to the bank in 1 year. Relevant operating cash flow for the project in year 1 is expected to be 259,061 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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