Grantand Marvin organized a new business as a corporation in which they own equal interests. The new business generated a $65,000 operating loss for the year. UseAppendix A.

a.Assume the corporation expects to generate $500,000 of income next year and has a 34 percent marginal tax rate. Calculate the net present value of the future tax savings associated with the current year operating loss, using a 4 percent discount rate.(Do not round intermediate computations. Round "PV factor" to 3 decimal places and final answer to the nearest whole dollar amount.)

b.Now assume that the corporation makes an election under Subchapter S to be treated as a passthrough entity. If Grant's marginal tax rate is 35 percent and Marvin's marginal tax rate is 39.6 percent, calculate the tax savings associated with the current year operating loss.