Collin Products received notice of a $21,000 income tax deﬁciency plus $4,300 inter-est. The deﬁciency related to an incorrect method of accounting for business inventory. Compute the after-tax cost of the $4,300 interest payment assuming that:
a. Collin Products is a corporate taxpayer with a 35 percent marginal tax rate.
b. Collin Products is a sole proprietorship owned by Leslie Collin. Leslie’s marginal tax rate on her Form 1040 is 35 percent.