When we covered cost–volume–profit (CVP) analysis in chapter 4, we calculated the amount of pre-tax profit needed to achieve a given level of after-tax profit. We could calculate a pre-tax rate of return given an after-tax rate of return. Why would it be inappropriate to use a pre-tax discount rate in capital budgeting? (For example, if an entity requires an after-tax return of 10 per cent and has a marginal income tax rate of 50 per cent, why not use a 20 per cent pre-tax rate of return and ignore the separate income tax calculations?)