If Julius has a 15% tax rate and a 7% after-tax rate of return, $53,500 of income in three years will cost him how much tax in today's dollars? Use Exhibit 3.1. (Round present and future value factor(s) to 3 decimal places.)

Multiple Choice

1. $6,548.
2. $43,656.
3. $8,025.
4. $53,500.
5. None of the choices are correct.

EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of Return