Irene is saving for a new car she hopes to purchase either four or six years from now. Irene invests $20.000 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. (For all requirements, do not round Intermedlate calculations. Round your final answers to nearest whole dollar amount.) a. What will be the value of this investment four and six years from now? Investment Value Four years Six 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)? After-tax cash Four years Six years Manny, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $36.000 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny's marginal tax rate is 37 percent this year and next year, and that he can earn an after-tax rate of return of 10 percent on his investments. a. What is the after-tax income if Manny sends his client the bill in December? Answer is complete and correct. After-tax income S 22,880 b. What is the after-tax income if Manny sends his client the bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) After-tax income Dennis is currently considering investing in municipal bonds that earn 5.55 percent interest, or in taxable bonds issued by the Coca- Cola Company that pay 7.40 percent. a. If Dennis's tax rate is 22 percent, which bond should he choose? Municipal bonds Taxable bonds b. Which bond should he choose if his tax rate is 32 percent? Municipal bonds Taxable bonds c. At what tax rate would he be indifferent between the bonds? Answer is complete but not entirely correct. Tax rate 30 %