Collin Products received notice of a $$27,000$ income tax deficiency plus $$4,000$ interest. The deficiency related to an incorrect method of accounting for business inventory.

Required:

a$.$ Compute the after$-$tax cost of the $$4,000$ interest payment assuming that Collin Products is a corporate taxpayer with a $21$ percent marginal tax rate.

b$.$ Compute the after$-$tax cost of the $$4,000$ interest payment assuming that Collin Products is a sole proprietorship owned by Leslie Collin. Leslie's marginal tax rate is $37$ percent.

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Required B

Compute the after$-$tax cost of the $$4,000$ interest payment assuming that Collin Products is a corporate taxpaye percent marginal tax rate.

After$-$tax cost