Mr. Sam Barker, the manager of a $275m CDO has created the tranches and their payments as the following: the $180m senior tranche receive a variable rate of L + 2.2%; the mezzanine tranche of $75m receives a fixed rate of (TR + 2%) and an equity tranche with no promises. In addition, he has entered into an interest rate swap of $180m notional value that pays a variable rate of (LIBOR 105 basis points) in return to a fixed-rate payment equal to the treasury rate + 0.75%. There is a $945,000 annual cost of running this CDO. Assuming that the collateral assets all pay a fixed rate of (treasury rate + 3.5%) and that the current treasury rate is 5.5%, show the cash flows for this CDO and calculate the possible rate of return for the equity tranche.