Isabel, a calendar-year taxpayer uses the cash method of accounting for her sole proprietorship. In late December she received a $28,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $28.000 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 11 percent on her investments. a. What is the after-tax cost if Isabel pays the $28.000 bill in December? After-tax cost b. What is the after-tax cost if Isabel pays the $28.000 bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) After-tax cost c. Based on requirements a and b. should Isabel pay the $28.000 bill in December or January O December January 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 1901 .893 Year 2 .925 .907 .890 .873 .857 .842 .826 812 .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 .481 417 362 315 275 239 209 .183