Company P must choose between two alternate transactions. The cash generated by Transaction 1 is taxable and the cash generated by Transaction 2 is nontaxable. Determine the marginal tax rate at which the after-tax cash flows from the two transactions are equal assuming that:

a. Transaction 1 generates $100,000 of income and Transaction 2 generates $60,000 of income.

b. Transaction 1 generates $160,000 of income and Transaction 2 generates $120,000 of income.