Billie Fruit lives in Alberta and her income fluctuates from year to year ranging from over $320,000 to about $75,000. She has two investments of$20,000 each in shares, both achieving a return of 7 percent; one by dividend, the other by capital gain.

a. Calculate the higher return on an aftertax basis if this is a high income year (assume 31.71% tax on dividends and 24.00% on capital gains). What is the afrertax yield?

b. Calculate the higher return on an aftertax basis if this is a low income year (assume 7.56% tax on dividends and 15.25 on capital gains). What is the afrertax yield?