#7

In the current year, Jill, age 35 , recelved a job offer with two alternative compensation packages to choose from. The first package offers her a $90,200 annual salary with no qualified fringe benefits and, requires her to pay $3,600 a year for parking and to purchase IIfe Insurance at a cost of $1,100. The second package offers an $80,100 annual salary, employer-provided health Insurance, annual free parking (worth $340 per month), $200,000 of Iffe Insurance (purchasing on her own would have been $1,100 annually), and free flight benefits (she estimates that It will save her $5,100 per year). If Jill chooses the first package, she will purchase the health and life Insurance benefits herself at a cost of $1,100 annually after taxes and spend another $5,100 in flights while traveling. Assume her marginal tax rate is 32 percent. (Use Exhibit 12-8.) Required: a1. Which compensation package should she choose? a2. How much would she benefit in after-tax dollars by choosing this compensation package instead of the alternative package? b1. Assume the first package offers a $102,000 salary Instead of a $90,200 salary, and the other benefits and costs are the same. Which compensation package should she choose? b2. How much would she benefit in after-tax dollars by choosing this package? Complete this question by entering your answers in the tabs below. Which compensation package should she choose? Complete this question by entering your answers in the tabs below. How much would she benefit in after-tax dollars by choosing this compensation package instead of the alternative package? Note: Round your intermediate computations to the nearest whole dollar amount. Assume the first package offers a $102,000 salary instead of a $90,200 salary, and the other benefits and costs are the same. Which compensation package should she choose? Complete this question by entering your answers in the tabs below. How much would she benefit in after-tax dollars by choosing this package? Note: Round your intermediate computations to the nearest whole dollar amount