Use the cash flows and competitive spreads shown in the table below.

		($ millions)
	Year 0	Year 1	Year 2	Years 310
Investment	120
Production (millions of pounds per year)	0	0	42	82
Spread ($ per pound)	.97	.97	.97	.97
Net revenues	0	0	40.74	79.54
Production costs	0	0	32.00	32.00
Transport	0	0	0	0
Other costs	0	22	22	22
Cash flow	120	22	13.26	25.54
NPV (at r = 10%) = 0

Assume the dividend payout ratio each year is 100%. a. Calculate the yearbyyear book and economic profitability for investment in polyzone production. Assume straightline depreciation over 10 years and a cost of capital of 10%. (Negative answers should be indicated by a minus sign. Leave no cells blank be certain to enter "0" wherever required. Do not round intermediate calculations. Enter your income answers in millions rounded to 2 decimal places and enter the rate of return as a percent rounded to 2 decimal places.)

Period	Book Income	Book Rate Of Return	Economic Income
0
1
2
3
4
5
6
7
8
9
10

b1. What is the economic rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Economic Rate of Return _______%

b2. Now compute the steadystate book rate of return (ROI) for a mature company producing polyzone. Assume no growth and competitive spreads. (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

ROI _______%