Problem 3-39 (LO 3-2, LO 3-3) (Algo) Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $70,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $70,000 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 9 percent on her investments. a. What is the after-tax cost if Isabel pays the $70,000 bill in December? Answer is complete but not entirely correct. After-tax cost $ 56,000 b. What is the after-tax cost if Isabel pays the $70,000 bill in January Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) Answer is complete but not entirely correct. After-tax cost $ 57,156 Prev 2 of 6 BE Next 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 .901 .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 1.747 .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 1.361 Year 10 .676 .614 558 .508 .463 422 386 1352 1322 Year 11 .650 .585 .527 .475 .429 .388 .350 1317 .287 Year 12 .625 .557 497 .444 .397 .356 .319 .286 .257 Year 13 .601 .530 .469 .415 .368 1326 .290 258 .229 Year 14 .505 .442 .388 .340 .299 263 .232 205 Year 15 .555 .481 417 .362 .315 .275 239 .209 .183 .577