If Julius has a 22 percent tax rate and a 9 percent after-tax rate of return, $44,500 of income in three years will cost him how much tax in today's dollars? Use Exhibit 3.1. (Round discount factor(s)to three decimal places.)

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First, we need to calculate the present value of $44,500 in three years at a discount rate of 5% (from Exhibit 3.1). Using the formula PV = FV / (1+r)^n, we have PV = $44,500 / (1+0.05)^3 = $37,761.73.
Next, we need to calculate the amount of income that is taxable. Since Julius has a 22% tax rate, his taxable income is $44,500 / (1-0.22) = $57,051.28.
Finally, we can calculate the amount of tax he will pay on this income using the formula Tax = Tax rate x Taxable income. Thus, Tax = 0.22 x $57,051.28 = $12,551.48.
To find the amount of tax in today's dollars, we need to discount it back to the present using the same discount rate of 5%. Thus, Tax today = $12,551.48 / (1+0.05)^3 = $7,558.18. Rounded to the nearest dollar, the answer is A) $7,558.

If Julius Has a 22 Percent Tax Rate and a 9