Question
Silver Sun Health is evaluating the yoga studio project. During year 1, the yoga studio project is expected to have relevant revenue of 630,100 dollars,
Silver Sun Health is evaluating the yoga studio project. During year 1, the yoga studio project is expected to have relevant revenue of 630,100 dollars, relevant variable costs of 234,300 dollars, and relevant depreciation of 71,900 dollars. In addition, Silver Sun Health would have one source of fixed costs associated with the yoga studio project. Silver Sun Health just signed a deal with Indigo River Media to develop an advertising campaign for use in the project. The terms of the deal require Silver Sun Health to pay Indigo River Media either 88,100 dollars in 1 year if the project is pursued or 122,200 dollars in 1 year if the project is not pursued. Relevant net income for the yoga studio project in year 1 is expected to be 175,277 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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started