Question: XYZ is evaluating a project that would require the purchase of a piece of equipment for $580,000 today. During year 1, the project is expected

XYZ is evaluating a project that would require the purchase of a piece of equipment for $580,000 today. During year 1, the project is expected to have relevant revenue of $780,000, relevant costs of $210,000, and relevant depreciation of $133,000. XYZ would need to borrow $580,000 today to pay for the equipment and would need to make an interest payment of $36,000 to the bank in 1 year. Relevant net income for the project in year 1 is expected to be $326,000. What is the tax rate expected to be in year 1?

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