In the current year, Jill, age 35, received a job offer with two alternative compensation packages to choose from. The first package offers her $90,600 annual salary with no qualified fringe benefits and requires her to pay $3,800 a year for parking and to purchase life insurance at a cost of $1,300. The second package offers $80,300 annual salary, employer-provided health insurance, annual free parking (worth $350 per month), $200,000 of life insurance (purchasing on her own would have been $1,300 annually), and free flight benefits (she estimates that it will save her $5,300 per year). If Jill chooses the first package, she will purchase the health and life insurance benefits herself at a cost of $1,300 annually after taxes and spend another $5,300 in flights while traveling. Assume her marginal tax rate is 32 percent.

Required:

a. How much would she benefit in after-tax dollars by choosing this compensation package instead of the alternative package?

b. How much would she benefit in after-tax dollars by choosing this package?