Rivera underpaid her income tax by $45,000. The IRS can prove that $40,000 of the underpayment was due to fraud.

Determine Rivera's civil fraud penalty.

Rivera pays the penalty five years after committing the fraudulent act. Compute the present value of Rivera's penalty. Assume her after-tax rate of return on available cash is 9%. The present value factor for 5 years and 9% is 0.6499.