Firm L has $$675,000$ to invest and is considering two alternatives. Investment A would pay $6$ percent $($$$40,500$ annual before$-$tax cash flow$).$ Investment B would pay $4\mathrm{.}8$ percent $($$$32,400$ annual before$-$tax cash flow$).$ The return on Investment A is taxable, while the return on Investment B is tax exempt. Firm L forecasts that its $21$ percent marginal tax rate will be stable for the foreseeable future.

Required:

a$.$ Compute the explicit tax and implicit tax that Firm L will pay with respect to Investment A and Investment B$.$

b$1.$ What is the annual after$-$tax cash flow for Investment A$?$

b$2.$ What is the annual after$-$tax cash flow for Investment B$?$

b$3.$ Which investment results in the greater annual after$-$tax cash flow?