1. A corporation has $7 million in equity. During the tax year it takes in $4 million in receipts and earns $2 million in capital gains from sale of a subsidiary. It incurs labor costs of $1 million, interest costs of $250,000, material costs of $500,000, and pays rent for structures of $250,000. Calculate the corporation's total accounting profit and, assuming that the profit is fully taxable, calculate its tax liability using the tax rates in Table 15.2. Calculate the ATR of the corporation as a percentage of its economic profit, assuming that the opportunity cost of capital is 8 percent. 2. A corporation has $5 million in assets and $3 million in debt. During the year it takes in $750,000 in net revenue after deduction of all costs except for interest and incurs interest expenses of $300,000. The corporation pays an ATR of 33 percent on its profit. a. Calculate the percentage return on equity after taxes for the corporation. b. Calculate the percentage return on equity for the corporation if it had the same net revenue but no debt and therefore no interest expense for the year