2. An investment company plans to purchase an apartment complex for $250,000. Annual income before taxes of $40,000 dollars is expected for the next three years, after which the property will be sold for an estimated $300,000. The state tax-rate is 8% and the federal tax rate is 30%, the estimated annual operating cost is $3,000 per year, and the gains on property sales are taxed at 35%. a. Compute the effective tax rate. b. Tabulate the cash flow after taxes for the years of ownership (only 3 years), if the property will be MACRS depreciated over a 15-year life. Assume a salvage value equal to 40% of the initial investment. Illustrate your computations including how you computed capital gains. c. Compute the after-tax rate of return. 2. An investment company plans to purchase an apartment complex for $250,000. Annual income before taxes of $40,000 dollars is expected for the next three years, after which the property will be sold for an estimated $300,000. The state tax-rate is 8% and the federal tax rate is 30%, the estimated annual operating cost is $3,000 per year, and the gains on property sales are taxed at 35%. a. Compute the effective tax rate. b. Tabulate the cash flow after taxes for the years of ownership (only 3 years), if the property will be MACRS depreciated over a 15-year life. Assume a salvage value equal to 40% of the initial investment. Illustrate your computations including how you computed capital gains. c. Compute the after-tax rate of return