Contemporary Engineering Economics 6th Edition by Chan Park

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Van-Line Company, a small electronics repair firm, expects an annual income of $170,000 from its regular business. The company is considering expanding its repair business to include flat-panel HDTV installation service. The expansion would bring in an additional annual income of $50,000, but it also will require an additional expense of $20,000 each year over the next three years. Using applicable current tax rates, answer the following.
(a) What is the marginal tax rate in tax year 1
(b) What is the average tax rate in tax year 1
(c) Suppose that the new business expansion requires a capital investment of $20,000 worth of special tools (a three-year MACRS property). At i = 10%, what is the PW of the total income taxes to be paid over the project life