A project has the following specifications: Preproduction period: 1 year Production period: 5 years Capital expenditure: $1800 Annual revenue: $500 Annual operating expenses: $200 The capital expenditure is to be depreciated by the declining-balance method at an annual rate of 30 percent and the corporate income tax rate is 50 percent. Assume a salvage value equal to the undepreciated balance.

I) Determine the project's time distribution of after-tax cash flows assuming taxation on a non-integrated (project) basis in which depreciation allowances cannot be used to create losses.

II) determine the project's time distribution of after-tax cash flows assuming taxation on an integrated basis in which there is enough corporate income to absorb all depreciation allowances in any given year.