If Thomas Has a 40% Tax Rate and a 6

question 15

Multiple Choice

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 today's dollars? Use Exhibit 3.1 in the text.(Round present and future value amounts to 3 places)

• A) $50,000.
• B) $20,000.
• C) $37,350.
• D) $14,940.
• E) None of the choices are correct.

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Definitions:

Employment at Will

A legal doctrine that means an employer can terminate an employee at any time for any reason, except an illegal one, and an employee can leave just as freely.

Employment Discrimination Law

Laws and regulations aimed at preventing workplace discrimination based on race, sex, religion, national origin, physical disability, and age.

Labor Law

Legislation concerned with the rights and responsibilities of workers, employers, and unions.

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