Irene is saving for a new car she hopes to purchase either four or six years from now. Irene invests $18,000 in a growth stock that does not pay dividends and expects a 6 percent annual before-tax return (the investment is tax deferred). When she cashes in the investment after either four or six years, she expects the applicable marginal tax rate on long-term capital gains to be 25 percent. Reference: Use the Conversion Strategy a. What will be the value of this investment four and six years from now?

4 years = 6 years = b.

When Irene sells the investment, how much cash will she have after taxes to purchase the new car (four and six years from now)?

4 years = 6 years =