Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

If Thomas has a 37 percent tax rate and a 9 percent after-tax rate of return, $81,500 of income in five years will cost him

image text in transcribedimage text in transcribed

If Thomas has a 37 percent tax rate and a 9 percent after-tax rate of return, $81,500 of income in five years will cost him how much tax in today's dollars? Use Exhibit 3.1. (Round discount factor(s) to three decimal places.) Multiple Choice $81,500 $30,155 $55,452 $19,601 None of the choices are correct. 826 EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of Return 4% 5% 6% 7% 8% 9% 10% 11% 12% Year 1 .962 .952 .943 .935 .926 917 .909 .901 .893 Year 2 925 907 .890 .873 .857 .842 .812 .797 Year 3 .889 .864 .840 .816 .794 .772 .751 .731 .712 Year 4 .855 .823 .792 .763 .735 .708 .683 .659 .636 Year 5 .822 .784 .747 .713 .681 .650 .621 .593 567 Year 6 .790 .746 .705 .666 .630 596 .564 535 507 Year 7 .760 .711 .665 .623 583 547 .513 482 452 Year 8 .731 .677 .627 582 540 502 467 434 404 Year 9 .703 .645 592 544 .500 460 424 391 361 Year 10 .676 .614 558 508 463 422 .386 352 .322 Year 11 .650 .585 527 475 429 .388 .350 .317 .287 Year 12 .625 .557 497 444 .397 356 319 .286 .257 Year 13 .601 .530 469 415 .368 326 .290 .258 .229 Year 14 577 505 442 388 340 .299 .263 .232 .205 Year 15 .555 481 417 .362 315 275 .239 .183 209

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

=+Could you create an interactive game on the website?

Answered: 1 week ago