4 Manny, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $19,000 of legal services for a client Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny's marginal tax rate is 32 percent this year and next year, and that he can eam an after-tax rate of return of 8 percent on his investments. What is the net benefit of collecting the bill in January? QUESTION 5 Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $30,000 bill from her accountant for consulting services related to her small business. Reese can pay the $30,000 bill any time before January 30 of next year without penalty. Assume Reese's marginal tax rate is 24 percent this year and will be 32 percent next year, and that she can earn an after-tax rate of return of 8 percent on her investments. When should she pay the $25,000 bill-this year or next? December January You should be indifferent because the net cost is the same in either case. You would need additional information to determine whether the payment should be made in December or January QUESTION 6 Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $30,000 bill from her accountant for consulting services related to her small business. Reese can pay the $30,000 bill any time before January 30 of next year without penalty Assume Reese's marginal tax rate is 24 percent this year and will be 22 percent next year, and that she can eam an after-tax rate of return of 8 percent on her investments. When should she pay the $30,000 bill-this year or next? December January Indifferent as the net benefit is the same in both cases. You need additional information to make a recommendation