Question
In 2015, Jill, age 35, received a job offer with two alternative compensation packages to choose from. The first package offers her $96,000 annual salary
In 2015, Jill, age 35, received a job offer with two alternative compensation packages to choose from. The first package offers her $96,000 annual salary with no qualified fringe benefits, requires her to pay $4,200 a year for parking, and will purchase life insurance at a cost of $1,850. The second package offers $86,000 annual salary, employer-provided health insurance, annual free parking (worth $320 per month), $225,000 of life insurance (purchasing on her own would have been $1,850 annually), and free flight benefits (she figures that it will save her $6,800 per year). If Jill chooses the first package, she would purchase health and life insurance benefits at $6,150 and $1,850, respectively, annually after taxes and spend another $6,800 in flights while traveling. Assume her marginal tax rate is 28 percent
Package 1 offers her $96,000 annual salary with no qualified fringe benefits.
Package 2 offers $86,000 annual salary plus health and life insurance benefit
a-2.
How much would she benefit in after-tax dollars by choosing this compensation package instead of the other compensation package? (Round your answer to the nearest whole dollar amount.)
Package 1 offers her $113,000 annual salary with no qualified fringe benefits.
Package 2 offers $86,000 annual salary plus health and life insurance benefits.
b-2.
How much would she benefit in after-tax dollars by choosing this package? (Round your answer to the nearest whole dollar amount.)
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