Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $23,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $23,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 6 percent on her investments. Required: a. What is the after-tax cost if Isabel pays the $23,000 bill in December? b. What is the after-tax cost if Isabel pays the $23,000 bill in January? Use Exhibit 3.1. Note: Round your answer to the nearest whole dollar amount. c. Based on requirements a and b, should Isabel pay the $23,000 bill in December or January? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the after-tax cost if Isabel pays the $23,000 bill in December? After-tax cost Required A Required B > Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $23,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $23,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 6 percent on her investments. Required: a. What is the after-tax cost if Isabel pays the $23,000 bill in December? b. What is the after-tax cost if Isabel pays the $23,000 bill in January? Use Exhibit 3.1. Note: Round your answer to the nearest whole dollar amount. c. Based on requirements a and b, should Isabel pay the $23,000 bill in December or January? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the after-tax cost if Isabel pays the $23,000 bill in January? Use Exhibit 3.1. Note: Round your answer to the nearest whole dollar amount. After-tax cost < Required A Required C > Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $23,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $23,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 6 percent on her investments. Required: a. What is the after-tax cost if Isabel pays the $23,000 bill in December? b. What is the after-tax cost if Isabel pays the $23,000 bill in January? Use Exhibit 3.1. Note: Round your answer to the nearest whole dollar amount. c. Based on requirements a and b, should Isabel pay the $23,000 bill in December or January? Complete this question by entering your answers in the tabs below. Required A Required B Required C Based on requirements a and b, should Isabel pay the $23,000 bill in December or January? EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of Return 4% Year 1 0.962 0.952 5% 6% 7% 0.943 0.935 Year 2 0.925 Year 3 0.889 0.864 0.840 0.907 0.890 0.873 0.816 0.926 0.857 0.794 0.772 0.751 0.731 0.712 8% 9% 10% 11% 12% 0.917 0.909 0.901 0.893 0.842 0.826 0.812 0.797 Year 4 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 Year 5 0.822 0.784 0.747 0.713 Year 6 0.790 0.746 0.705 0.666 0.681 0.630 Year 7 0.760 0.711 Year 8 0.731 0.677 0.627 Year 9 0.703 0.645 0.592 Year 10 0.676 0.614 0.558 0.650 0.596 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.582 0.540 0.502 0.467 0.544 0.500 0.460 0.424 0.508 0.463 0.422 0.386 0.621 0.593 0.567 0.564 0.535 0.507 0.434 0.404 0.391 0.361 0.352 0.322 Year 12 Year 11 0.650 0.625 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 Year 13 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 0.229 Year 14 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.205 Year 15 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.209 0.183