Use the cash flows and competitive spreads shown in the table below.

		($ millions)
	Year 0	Year 1	Year 2	Years 310
Investment	160
Production (millions of pounds per year)	0	0	57	97
Spread ($ per pound)	1.12	1.12	1.12	1.12
Net revenues	0	0	63.84	108.64
Production costs	0	0	47.00	47.00
Transport	0	0	0	0
Other costs	0	37	37	37
Cash flow	160	37	20.16	24.64
NPV (at r = 10%) = 0

Assume the dividend payout ratio each year is 100%. a. Calculate the yearbyyear book and economic profitability for investment in polyzone production. Assume straightline depreciation over 10 years and a cost of capital of 10%. (Negative answers should be indicated by a minus sign. Leave no cells blank be certain to enter "0" wherever required. Do not round intermediate calculations. Enter your income answers in millions rounded to 2 decimal places and enter the rate of return as a percent rounded to 2 decimal places.)

b1. What is the economic rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

b2. Now compute the steadystate book rate of return (ROI) for a mature company producing polyzone. Assume no growth and competitive spreads. (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

\begin{tabular}{|c|c|c|c|} \hline Period & Bookincome($inmillions) & Bookrateofreturn(%) & Economicincome($inmillions) \\ \hline 0 & & & \\ \hline 1 & & & \\ \hline 2 & & & \\ \hline 3 & & & \\ \hline 4 & & & \\ \hline 5 & & & \\ \hline 6 & & & \\ \hline 7 & & & \\ \hline 8 & & & \\ \hline 9 & & & \\ \hline 10 & & & \\ \hline \end{tabular}