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QUESTION 1 Isabel, a calendar year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $21,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $21,000 bill anytime before January 30 of next year without penalty Assume her marginal tax rate is 32 percent this year and next year, and that she can earn an afer-tax rate of return of 6 percent on her investments. What is the net cost of making the payment in December? 80,943 QUESTION 2 Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $21,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $21,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 32 percent this year and next year, and that she can earn an after-tax rate of return of 6 percent on her investments. What is the next cost of making the payment in January? 13.000 QUESTION 3 Manny, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $21,000 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny's marginal tax rate is 24 percent this year and next year, and that he can cam an after-tax rate of return of 6 percent on his investments. What is the net benefit of collecting the bill in December? 34,659

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