Affiliate X sells 13,600 units to Affiliate Y per year. The marginal tax rates for X and Y are 20 percent and 30 percent, respectively. The transfer price per unit is currently set at $1,000, but it can be set as high as $1,250. Calculate the increase in annual after-tax profits if the higher transfer price of $1,250 per unit is used.

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A: Rate of return is the annual income in percentage earned from an investment.

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