If Thomas has a 40% tax rate and a 6% after-tax rate of return, $50,000 of income in five years will cost him how much tax in todays dollars (rounded)?

If Thomas has a 40% tax rate and a 6% after-tax rate of return, $50,000 of income in five years will cost him how much tax in todays dollars (rounded)?

If Thomas has a 40% tax rate and a 6% after-tax rate of return, $50,000 of income in five years will cost him how much tax in todays dollars (rounded)?


A. $50,000

B. $20,000

C. $37,350

D. $14,940

E. None of these


Answer: D


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