Anastasia wants to invest $1.5M. Based on her income she is currently in the 33% tax bracket for ordinary income and in the 15% bracket for long-term capital gains. Her tax brackets for state income tax purposes are 7% and 0% on long-term capital gains. Consider the following situations: Type Situation 2 Situation 2 Corporate Municipal Bonds Bonds Time horizon 5 years 7 years Income 11% interest 6.5% interest annually annually Discount rate 5.5% 5% Repaid after 5 Repaid after Repayment/Sale years 7 years Not taxable Taxable at for federal ordinary Comments income tax income tax but state rates; no state income tax of income tax 7% applies Requirements: Determine the net present value of the after-tax cash flow for: (1) Situation 1: (2) Situation 2: