A large corporation subjected to 35% marginal tax is investing in a new income producing asset that is depreciated on a MACRS 3 year schedule. The full price of the asset is 250,000 but the asset will be financed at an interest rate of 8.00% over 5 years after a down payment of 10%. The expected revenue and costs in year 1 dollars are given below. Given general market competition the expected maximum price increase that the company expects to be able to impose is 1.5% per year after year 1. Based on historical costs, the expected inflation of costs is expected to be 3.2% after year 1. Note that is inflation does not apply to finance costs of principal and interest payments. When retired, the asset will have no value.

Year	1	2	3	4	5	6
Direct Revenue	120,000	280,000	360,000	320,000	210,000	90,000
Direct and Allocated Cost	85,000	120,000	160,000	150,000	110,000	65,000

Prepare a net cash flow statement / exhibit in actual dollars not constant dollars for all 6 years of the new asset since taxes are imposed on actual dollar calculations each year.

a. What is the net cash flow after taxes and loan payments in year 3 in actual dollars?

b. What is the net cash flow after taxes and loan payments in year 6 in actual dollars?

c. What is the rate of return on real actual dollars (market rate of return) of the net cash flow expressed with 3 digits after decimal point in percentage format?