Tremaine would like to organize UTA as either an S Corporation or a C corporation. In either form, the entity will generate a $9$ percent annual before$-$tax return on a $$1,000,000$ investment. Tremaine's marginal income tax rate is $37$ percent, and his tax rate on dividends and capital gains is $23\mathrm{.}8$ percent $($including the net investment income tax$).$ If Tremaine organizes UTA as an $S$ corporation, he will be allowed to claim the deduction for qualified business income. Also, because Tremaine will participate in UTA's business activities, the income from UTA will not be subject to the net investment income tax. Assume that UTA will pay out $25$ percent of its after$-$tax earnings every year as a dividend if it is formed as a $C$ corporation.

a$.$ How much cash after taxes would Tremaine receive from his investment in the first year if UTA is organized as either an $S$ corporation or as a Corporation?

b$.$ What is the overall tax rate on UTA's income in the first year if UTA is organized as an S corporation or as a $C$ corporation?

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