The income tax rate for Hudson Refinery has been 35 percent for each of its 12 years in operation. Company forecasters expect the much-debated tax reform bill that has been passed by the new Congress this year will decrease Hudson's tax rate to 15 percent.

• Discuss the company's deferred tax liability strategy going forward. Which rate should the company use, and why should they use that rate?
• Discuss the impact that strategy will have on the company's net income and cash flow for the next three years.