Determine the effective tax rate on all of last year

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An engineer named Don maintains a small incorporated civil engineering consulting practice. Last year, Don%u2019s firm%u2019s taxable income was $41,000. During that year, he spent a great of non-billable time developing computerized tools for analyzing changes in water runoff due to new highway, building, and parking lot construction. Given his expertise and his ability to sign off as a licensed professional engineer (he took the FE exam in college), this year his company has been given the opportunity to take on two projects that will increase taxable income by $175,000.

a. Determine the effective (average) tax rate on all of last year%u2019s taxable income.

b. Determine the effective (average) tax rate on all of this year%u2019s taxable income.

c. Determine the incremental tax rate.

d. Determine the marginal tax rate this year.

Reference no: EM13158349

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