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Blayne has decided that he needs to purchase medical insurance that will cost him $9,000. His employer has offered to reduce his salary to $80,000
Blayne has decided that he needs to purchase medical insurance that will cost him $9,000. His employer has offered to reduce his salary to $80,000 and provide the medical coverage. Currently, his salary is $90,000 resulting in an after-tax value of $57,915. Assume Blayne has a 28% marginal tax rate and social security and medicare tax is 7.65%. Blayne should _______.
I know that the answer is accept his employer's offer because, but I need help with figuring out why. I do not know how to do the math to get to the answer.
7 Still learning Know 0 Q Get a hint Blayne has decided that he needs to purchase medical insurance that will cost him $9,000. His employer has offered to reduce his salary to $80,000 and provide the medical coverage. Currently, his salary is $90,000 resulting in an after-tax value of $57,915. Assume Blayne has a 28% marginal tax rate and social security and medicare tax is 7.65%. Blayne should - accept his employer's offer because it results in a \$2,565 increase in the value of his after-tax compensation - purchase the insurance himself because accepting the offer would result in a $3,565 decrease in the value of his after-tax compensation - purchase the insurance himself because he would be giving up $10,000 of compensation for a policy that would only cost him $9,000Step by Step Solution
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