Bleach Blast Disinfecting Wipes Inc. is ramping up production and needs to raise approximately $2,000,000. They are considering two plans. Assuming that the companys tax rate is 30%, calculate the annual after-tax cost (in dollars) of each plan:

1. Plan A - Borrow $2,000,000 from a local bank, at an interest rate of 5% per year.

2. Plan B - Issue 50,000 shares of $1.50 cumulative preferred stock for $40 each.