If Julius has a 20% tax rate and a 10% after-tax rate of return,$25,000 of income in three 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)

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To find the tax in today's dollars, calculate the present value of the tax amount. The tax on $25,000 is 20%, which is $5,000. Using a 10% after-tax rate of return, the present value of $5,000 in three years is $5,000 / (1 + 0.10)^3 = $3,755.

If Julius Has a 20% Tax Rate and a 10