A corporation with a 34% combind income tax rate is considering the following investment in research equipment has projected the benefits as follows:

year before-tax cash flow

0 -$ 5,000,000

1 200,000

2 800,000

3 1,760,000

4 1,376,000

5 576,000

6 288,000

Prepare an after-tax cash flow table assuming MACRS depreciation.

(a) what is the after-tax rate of return?

(b)what is the before- tax rate of return ?