If Thomas has a 28% tax rate and a 12% after-tax rate of return, $86,000 of income in five 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. $86,000.
2. $24,080.
3. $52,446.
4. $13,653.
5. None of the choices are correct.

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