Prob.I:18-24 Investment Planning. Martha, who is in the 35% tax bracket has $40,000 of before-tax income with which she wants to make a one-time investment. She wants to put $20,000 of this income in a deductible H.R. 10 plan, and she wants to invest any remaining after-tax income outside the H.R. 10 plan. Assume that Martha has sufficient SE income such that her contribution does not exceed the H.R. 10 contribution limit. Two investments are available:(1) a taxable bond yielding a 10% BTROR and (2) anondividend paying stock that appreciate at a 10% annual rate before taxes. She is considering two alternatives: 1. Have the H.R. 10 plan invest in the stock, and Martha will invest in the bond outside the H.R. 10 plan. 2. Have the H.R. 10 plan invest in the bond, and Martha will invest in the stock outside the H.R. 10 plan. The investment horizon is 10 years with tax rates constant over the period. Capital gains upon sale of stock outside the H.R. 10 plan are taxed at 15%. However, if the stock is placed in the H.R. 10 plan, the H.R. 10 plan will sell the stock after 10 years and distribute the proceeds to Martha, trigerring ordinary income recognition to Martha. Assume no early withdrawal penalties on H. R. 10 plan distributions. Determine the total after-tax accumululation of Alternative 1 and of Alternative 2. Which of the two alternatives should Martha choose