During the year, Daniel drove a total of $22,000km,$ of which

$4,000km$ were for his employer. Daniel anticipates that travel

costs in the future will be about the same as they were this

year. His contract of employment requires that he pay his own

automobile expenses. No reimbursement is made for the vehicle.

Daniel is required to purchase and maintain his own small tools.

Every year, he spends approximately $$500$ on new tools and to

replace lost or stolen tools. He also purchases his own work

coveralls and pays for their cleaning, which amounts to another

$$300$ per year.

Daniel will take possession of his new home in three months,

and he is currently shopping for a mortgage. He expects to obtain

a $$90,000$ mortgage with interest at $4\%$ for a term of five years.

Daniel maintains the following insurance policies:

Table Summary: The table has two columns

with a header in row one. Column one, row

one is blank.

Premium cost

Term life insurance of $$300,000$$$1,200$

Private medical insurance $600$

House fire insurance $,1,000$

Daniel is a golfer and belongs to a private club. His annual

membership dues are $$2,400.$

Page $110$

Exhibit $2$: Information Regarding Offer of Employment with

Competitor

The proposed salary is $$70,000$ per year. From that amount, the employer will deduct the required income tax, EI premiums of

$$1,002,$ and CPP contributions of $$3,754.$

The employer will lease an automobile identical to the one

currently used by Daniel. However, the employer's lease cost

will be only $$450$ per month, including HST$,$ because of a fleet

discount. In addition, the employer will pay the annual insurance

cost of $$800,$ the repair and maintenance costs, which are

estimated to be $$600$ annually, and the gasoline costs of $$2,200.$

Daniel will be entitled to operate the car for personal use. The

number of business kilometres and personal kilometres driven

will be the same as they are now. The employer will pay for all

out$-$of$-$town meals when an overnight stay is required. The cost

of meals is expected to be $$200$ per year.

The employer maintains a good supply of small tools, and

mechanics are not required to purchase or use their own. In

addition, the employer maintains a complete wardrobe of work

coveralls, so Daniel will not have to purchase or launder his own.

As a senior mechanic, Daniel will be entitled to a low$-$interest

loan $(1\%)$ from the employer of up to five years' duration. Such

loans can be renewed at the end of term. The maximum loan

amount is $$40,000.$ Assume the prescribed interest rate set by the

CRA is currently $4\%.$

The employer maintains a group term life insurance program and

a private medical insurance program. At no cost to Daniel, the

employer will provide $$300,000$ of group term life insurance as

well as CASE ONE Daniel Hudson

Daniel Hudson is a senior mechanic in the logging industry. Because of the

specialized nature of his work, he is highly paid. His current employer pays him

a basic salary with no special benefits.

Recently, Daniel received an offer of employment from a corporation in the

same line of business. The salary offered is lower than he currently receives, but

a number of benefits are included in the remuneration package.

Daniel is confused by the offer. He does not like the idea of a reduced salary, but

realizes that the benefits have some value. He also realizes that what is important

is the level of disposable income that he has for himself and his family.

Daniel has provided you with the pertinent information $($see Exhibit $1$ and $2)$ and

has asked you to help him make a decision.

Exhibit $1$: Information Regarding Current Employment and Certain

Other Expenditures

Daniel's gross salary for $2023$ will be $$80,000.$ From this, the

employer will deduct the required income tax, EI premiums of

$$1,002,$ and CPP contributions of $$3,754.$

It is part of Daniel's ordinary duties to work on equipment at

locations other than the main repair depot. On average, he is

called out of town two or three days each month. On such trips,

he must always stay overnight in a hotel. The company

reimburses him for his hotel costs $($lodging but not meals$).$

Daniel leases his own car at $$500$ per month, including HST$.$ He

incurred the following additional travel costs in the current year:

Rep