If Julius Has a 32 Percent Tax Rate and a 10

Multiple Choice

If Julius has a 32 percent tax rate and a 10 percent after-tax rate of return, a $40,000 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.)

A) $40,000
B) $10,573
C) $33,040
D) $12,800
E) None of the choices are correct.