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(Appendix 8C) Rieben Corporation is considering a capital budgeting project that would involve investing $120, 000 in equipment with an estimated useful life of 4 years and no salvage value at the end of the useful life.Annual incremental sales from the project would be $320, 000 and the annual incremental cash operating expenses would be $220, 000.A one-time renovation expense of $40, 000 would be required in year 3.The company's income tax rate is 30%. The company uses straight-line depreciation on all equipment.
The income tax expense in year 3 is:
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