1. Tom sold an investment for $15,000 which he had paid $5,000 for several years earlier. Toms average tax rate is 20% and his tax rate is 25%. His after-tax proceeds are:
   1. $9,000 10,000 (10,000 x .5 x .2)
   2. $8,750 10,000 (10,000 x .5 x .25)
   3. $13,750 15,000 (10,000 x .5 x .25)
   4. $14,000 15,000 (10,000 x .5 x .2)