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Seiko's current salary is $ 1 2 7 , 5 0 0 . Her marginal tax rate is 3 2 percent, and she fancies European
Seiko's current salary is $ Her
marginal tax rate is percent, and she
fancies European sports cars. She
purchases a new auto each year. Seiko is
currently a manager for Idaho Office
Supply, Inc. Her friend, knowing of her
interest in sports cars, tells her about a
manager position at the local BMW and
Porsche dealer. The new position pays
only $ per year, but it allows
employees to purchase one new car per
year at a discount of $ This
discount qualifies as a nontaxable fringe
benefit. In an effort to keep Seiko as an
employee, Idaho Office Supply, Inc. offers
her a $ raise. Answer the following
questions about this analysis.
c What salary would Seiko need to receive from Idaho
Office Supply, Inc. to make her financially indifferent after
taxes between receiving additional salary from Idaho
Office Supply and accepting a position at the auto
dealership? Round your intermediate computations to
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