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Mary works for a company that pays a year-end bonus in December of each year. Assume that Mary expects to receive a $5,000 bonus in
Mary works for a company that pays a year-end bonus in December of each year. Assume that Mary expects to receive a $5,000 bonus in December this year, her marginal tax rate is 18%, and her after-tax rate of return is 8% (1 year discount rate of 0.926). If Marys employer paid her bonus on January 1 of next year instead of in December of current year and she will have the same marginal tax rate in the next year, how much would this action save Mary in todays tax dollars? (round to the nearest dollar, no commas)
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