1.The Simon Machine Tools Company is considering purchasing a new set of machine tools to process special orders. The following financial information is available.

- Without the project, the company expects to have a taxable income of $368,000 each year from its regular business over the next three years. - With the three-year project, the purchase of a new set of machine tools at a cost of $52,000 is required. The equipment falls into the MACRS three-year class. The tools will be sold for $18,000 at the end of project life. The project will be bringing in additional annual revenue of $85,000, but it is expected to incur additional annual operation of $17,000. What are the additional income taxes paid because of the project in year 2 if the tax rate is 34%?

2. The Simon Machine Tools Company is considering purchasing a new set of machine tools to process special orders. The following financial information is available. - Without the project, the company expects to have a taxable income of $487,000 each year from its regular business over the next three years. - With the three-year project, the purchase of a new set of machine tools at a cost of $44,000 is required. The equipment falls into the MACRS three-year class. The tools will be sold for $17,000 at the end of project life. The project will be bringing in additional annual revenue of $83,000, but it is expected to incur additional annual operation of $30,000. What are the gains tax it pays at the end of year 3 if the tax rate is 34%?