You have been given the following information on a project:

*equity risk premium of 5.5%

* tax rate of 40%

* It has a five-year lifetime

* The initial investment in the project will be 25M and the investment will be depreciated straight line, down to a salvage value of 10M at the end of the 5th year.

* The revenues are expected to be $20 next year and grow 10% a year after that for the remaining four years

* The COGS, excluding depreciation, is epected to be 50% of revenues

a. Estimate the pretax return on capital, by year and on average, for the project

b. Estimate the after-tax return on capital, by year and on average, for the project

c. If the firm faced a cost of capital of 12%, should it take this project?