"The Simon Machine Tools Company is considering purchasing a new set of machine tools to process special orders. The following financial information is available.
- Without the project, the company expects to have a taxable income of $349,000 each year from its regular business over the next three years.
- With the three-year project, the purchase of a new set of machine tools at a cost of $51,000 is required. The equipment falls into the MACRS three-year class. The tools will be sold for $16,000 at the end of project life. The project will be bringing in additional annual revenue of $87,000, but it is expected to incur additional annual operation of $22,000.
What are the additional income taxes paid because of the project in year 1 if the tax rate is 34%?"