Manny calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $29.000 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 40 percent this year and next year, and that he can earn an after-tax rate of return of 12 percent on his investments a. What is the after tax income if Manny sends his client the bill in December? After-tax income b. What is the after-tax income if Manny sends his client the bill in January? Use Exhibit 3.1 c. Based on requirement a and b. should Manny send his client the bill in December of January O December January EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of Return Year 4% 5% 6% 7% 8% 9% 10% 11% 12% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 .962 .925 .889 .855 .822 .790 .760 731 .703 678 .650 .625 .601 .577 .555 952 .907 .864 .823 1784 746 .711 1677 .645 .614 .585 ,557 .530 .505 481 .943 .890 .840 .792 .747 .705 .865 .627 .592 558 .527 .497 .469 .442 417 .935 .873 .816 .763 .713 .666 623 582 .544 .508 .475 .444 415 388 362 1926 .857 .794 1735 .681 630 .583 .540 500 .463 .429 .397 .368 .340 .315 .917 1842 .772 .708 .650 .596 .547 .502 .460 .422 .388 356 326 1299 .275 .909 .826 .751 .683 .621 .564 .513 467 .424 .386 350 319 .290 .263 .239 .901 .812 1.731 .659 .593 .535 482 434 .391 .352 317 .286 .258 .232 .209 .898 .797 .712 .636 .567 .507 .452 404 1361 .322 .287 .257 229 205 .183