Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $40,000 of legal services for a client Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 32 percent this year and will be 37 percent next year, and that he can earn an after-tax rate of return of 5 percent on his Investments. Required: a. What is the after-tax income if Hank sends his client the bill in December? b. What is the after-tax income if Hank sends his client the bill in January? Use Exhibit 3.1 Note: Round your answer to the nearest whole dollar amount. c. Based on requirements a and b, should Hank send his client the bill in December or January? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the after-tax income if Hank sends his client the bill in December? After-tax income Required A Required B > Year 4% 5% 6% 7% 8% 9% 10% 11% 12% 1 .962 .952 943 935 .926 .917 909 .901 .893 2 925 .907 .890 .873 .857 .842 .826 .812 .797 3 .889 .864 .840 .816 .794 .772 .751 .731 .712 4 .855 .823 .792 .763 .735 .708 .683 .659 .636 S .822 .784 .747 .713 .681 .650 .621 .593 .567 6 .790 .746 .705 .666 .630 .596 .564 .535 .507 7 .760 .711 .665 .623 .583 .547 .513 .482 .452 8 .731 .677 .627 .582 .540 .502 .467 .434 .404 9 .703 .645 .592 .544 .500 .460 .424 .391 .361 10 .676 .614 .558 .508 .463 .422 .386 .352 .322 11 .650 .585 .527 .475 .429 .388 .350 .317 .287 12 .625 .557 .497 444 .397 .356 .319 .286 .257 13 .601 .530 .469 .415 .368 .326 .290 .258 .229 14 .577 .505 .442 .388 .340 .299 .263 232 .205 15 .555 .481 .417 .362 .315 275 239 209 183