Firm E must choose between two alternative transactions. Transaction $1$ requires a $$9,750$ cash outlay that would be nondeductible in

the computation of taxable income. Transaction $2$ requires a $$11,500$ cash outlay that would be a deductible expense.

Required:

a$.$ Determine the after$-$tax cost for each transaction. Assume Firm E$\text{'}$s marginal tax rate is $10$ percent.

b$.$ Determine the after$-$tax cost for each transaction. Assume Firm E$\text{'}$s marginal tax rate is $30$ percent.