Matrix Service Company is an industrial service contractor with a strong reputation in refining, power, petrochemicals, gas/LNG, and related areas. Their base taxable income is $19.2 million on sales of $490 million.

They have landed two large aboveground storage tank projects and expect taxable income to increase to $25.7 million on sales of $540 million next year.

a. Determine the effective (average) tax rate on all of last year’s taxable income.

b. Determine the effective (average) tax rate on all of this year’s taxable income.

c. Determine the incremental tax rate.

d. Determine the marginal tax rate for next year.