Manning Inc. is contemplating the rental of a special tool for $45,000 per month. If their tax rate is 40%, what is the after-tax monthly cost of renting the tool?

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The after-tax cost of renting the tool is calculated as the rental cost minus the tax savings from the rental expense. The tax savings are calculated as the rental cost times the tax rate. Therefore, the after-tax cost is $45,000 - ($45,000 * 40%) = $45,000 - $18,000 = $27,000.