Tom has $40,000 to invest and seeks your advice. A partner at Global Investments has proposed two investment opportunities: a real estate limited partnership or a five-year investment contract that will pay interest of 8% annually and return his original investment at the end of the fifth year. Tom will invest the interest he receives from the investment contract each year in a savings account that will pay 5% per year. The lim- ited partnership expects losses in the first two years of $8,000 and $6,000 but expects that its income in years three through five will be $4,000, $10,000, and $12,000. At the end of year five, Tom believes, he will be able to sell the limited partnership at a gain of $5,000. He expects that his marginal tax rate over the five-year period will be 28%. Write a letter to Tom explaining whether he should invest in the limited partnership or the investment contract. In your letter, discuss any other factors he should con- sider concerning the two investments.