1.Some practitioners use an incremental profit rate instead of an average profit rate and normalize investment by dividing it by after-tax net operating income, defined as Xt(1-T). This expression,...

1.Some practitioners use an incremental profit rate instead of an average profit rate and normalize investment by dividing it by after-tax net operating income, defined as Xt(1-T). This expression, It/Xt(1-T), where It is in dollars, is defined as b.The new formula is shown here: Use this new expression to repeat the calculation in Question 4. How does your answer compare to your answer in Question 4? 6 In Rappaport (1998), our equation (3) is modified slightly. Investment is expressed as a ratio of the change in sales. Therefore, the first part of the first term in equation (3) will read: If “I” is 50%, how does the new value compare with what you obtained in the previous two questions?