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

Question

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

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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

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