Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $20,000 bill from her accountant for consulting services related to her small business. Reese can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume Reese's marginal tax rate is 32 percent this year and will be 37 percent next year, and that she can earn an after-tax rate of return of 12 percent on her investments. a. What is the after-tax cost if she pays the $20,000 bill in December? After-tax cost b. What is the after-tax cost if she pays the $20,000 bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) After-tax cost .666 EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of Return 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 1.712 Year 4 1.855 .823 .792 .763 .735 708 .683 .659 .636 Year 5 .822 .784 747 .713 .681 .650 .621 .593 .567 Year 6 .790 .746 .705 .630 .596 .564 .535 .507 Year 7 .760 .711 .665 .623 .583 .547 .513 .482 .452 Year 8 .731 .677 .627582 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 39209 .209 .183