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$84.48 is incorrect Nitai, who is single and has no dependents, was planning on spending the weekend repairing his car. On Friday, Nitais employer called
$84.48 is incorrect
Nitai, who is single and has no dependents, was planning on spending the weekend repairing his car. On Friday, Nitais | ||||
employer called and offered him $600 in overtime pay if he would agree to work over the weekend. Nitai could get his car | ||||
repaired over the weekend at Autofix for $504. If Nitai works over the weekend, he will have to pay the $504 to have his | ||||
car repaired but he will earn $600. Assume Nitai pays tax at a flat 12 percent rate. | ||||
(Do not round intermediate calculations. Round your answers to 2 decimal places.) | ||||
a-1. Strictly considering tax factors, should Nitai work or repair his car if the $504 he must pay to have his car fixed is not deductible? | ||||
Work | 600 x 12% = $60 , (600-72 = $528) | |||
Repair | $528 - 504) = $24 | |||
a-2. Given the answer in a-1 above, by how much is Nitai better or worse off? | ||||
$600 - 504 = $96 | ||||
Better-off | 84.48 | $96 x 12% = $11.52 |
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