Compare the taxes an individual would pay if he or she had a million dollars to invest in a machine that lasts one period only, yielding a gross return of $1.2 million, if the individual incorporates and if he or she does not. Assume that if the individual incorporates, he or she

(a) Lends the company the million dollars to buy the machine or

(b) Invests the money as equity. Also, assume that if the individual incorporates and provides capital to the firm in the form of equity, he or she (a) pays out the net profits as dividends,

(b) Manages to distribute the funds in a way that gets favorable capital gains treatment,

(c) Dies next year, before the profits have been distributed, and leaves the firm-with its cash position of $200,000-to his or her son, who manages to sell the firm for $200,000. Assume that the individual can subtract the full million dollars as depreciation, and that interest is tax deductible.