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If Julius has a 32 percent tax rate and a 10 percent after-tax rate of return,...

If Julius has a 32 percent tax rate and a 10 percent after-tax rate of return, a $36,000 tax deduction in two years will save how much tax in today's dollars? Use Exhibit 3.1. (Round discount factor(s) to three decimal places.)

$11,520.

$29,736.

None of the choices are correct.

$36,000.

$9,516.

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Answer is highlighted in yellow: Solution: $ 9,516 Answer: Explanation: $ 36,000 $ 11,520 Tax deduction Tax saving (36000*32%

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