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Assignment 1: Calculating Tax Cost
Microtech Software Corporation (MSC) was founded in 2001. The founder, Chan Li, studied at MIT and worked for a large software corporation before returning to his hometown, Centervale, to set up his own company.
The corporate tax rate structure applicable in Centervale is as follows:
MSC has an opportunity to invest in a project that is expected to generate an additional $55,000 of taxable income.
Compute the tax cost of this additional income for the following three scenarios:
Show all the steps of the calculation and the final answer for each scenario. Compare the results for the three scenarios and comment on any differences.
Write a one page paper in MS Word format. Apply APA standards.
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