At the beginning of the year, Mr. Lanier put $50,000 cash into Investment X. At the end of the year, he received a check for $2,800, representing his annual return on the investment. Mr. Laniers marginal tax rate on ordinary income is 37 percent. However, his return on Investment X is a capital gain taxed at 20 percent. At the beginning of the year, Mr. Lanier could have invested his $50,000 in Business Z with an 8 percent annual return. However, this return would have been ordinary income rather than capital gain. Required:

A. Considering the fact that Mr. Lanier could have invested in Business Z, how much implicit tax did he pay with respect to Investment X? **** Answer A. in dollars$ not a percentage*****

B. Did Mr. Lanier make the correct decision by putting his $50,000 into Investment X instead of Business Z?