Seiko's current salary is $106,500. Her marginal tax rate is 32 percent, and she fancies European...
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Seiko's current salary is $106,500. Her marginal tax rate is 32 percent, and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. 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 $94,000 per year, but it allows employees to purchase one new car per year at a discount of $21,300. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $15,600 raise. Answer the following questions about this analysis. Required: What is the annual after-tax cost to Idaho Office Supply if it provides Seiko with the $15,600 increase in salary? Note: Ignore payroll taxes. b-1. Financially, which offer is better for Seiko on an after-tax basis? b-2. By how much is the offer better for Seiko on an after tax basis? (Assume that Seiko is going to purchase the new car whether she switches jobs or not.) c. What salary would Seiko need to receive from Idaho Office Supply to make her financially indifferent (after taxes) between receiving additional salary from Idaho Office Supply and accepting a position at the auto dealership? Note: Round your intermediate computations to the nearest dollar amount. Required A Required B1 Required B2 Required C What is the annual after-tax cost to Idaho Office Supply if it provides Seiko with the $15,600 increase in salary? Note: Ignore payroll taxes. After-tax cost Required A Required B1 Required B2 Required C Financially, which offer is better for Seiko on an after-tax basis? Car dealer's offer Required C d A Required B1 Required B2 Required C By how much is the offer better for Seiko on an after tax basis? (Assume that Seiko is going to purchase the new car whether she switches jobs or not.) Offer is better by Required A Required B1 Required B2 Required C What salary would Seiko need to receive from Idaho Office Supply to make her financially indifferent (after taxes) between receiving additional salary from Idaho Office Supply and accepting a position at the auto dealership? Note: Round your intermediate computations to the nearest dollar amount. Salary needed Seiko's current salary is $106,500. Her marginal tax rate is 32 percent, and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. 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 $94,000 per year, but it allows employees to purchase one new car per year at a discount of $21,300. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $15,600 raise. Answer the following questions about this analysis. Required: What is the annual after-tax cost to Idaho Office Supply if it provides Seiko with the $15,600 increase in salary? Note: Ignore payroll taxes. b-1. Financially, which offer is better for Seiko on an after-tax basis? b-2. By how much is the offer better for Seiko on an after tax basis? (Assume that Seiko is going to purchase the new car whether she switches jobs or not.) c. What salary would Seiko need to receive from Idaho Office Supply to make her financially indifferent (after taxes) between receiving additional salary from Idaho Office Supply and accepting a position at the auto dealership? Note: Round your intermediate computations to the nearest dollar amount. Required A Required B1 Required B2 Required C What is the annual after-tax cost to Idaho Office Supply if it provides Seiko with the $15,600 increase in salary? Note: Ignore payroll taxes. After-tax cost Required A Required B1 Required B2 Required C Financially, which offer is better for Seiko on an after-tax basis? Car dealer's offer Required C d A Required B1 Required B2 Required C By how much is the offer better for Seiko on an after tax basis? (Assume that Seiko is going to purchase the new car whether she switches jobs or not.) Offer is better by Required A Required B1 Required B2 Required C What salary would Seiko need to receive from Idaho Office Supply to make her financially indifferent (after taxes) between receiving additional salary from Idaho Office Supply and accepting a position at the auto dealership? Note: Round your intermediate computations to the nearest dollar amount. Salary needed
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Answer To calculate the annual aftertax cost to Idaho Office Supply if it provides Seiko with a 1560... View the full answer
Related Book For
Taxation Of Individuals And Business Entities 2019 Edition
ISBN: 9781259918391
10th Edition
Authors: Brian C. Spilker, Benjamin C. Ayers, John Robinson, Edmund Outslay, Ronald G. Worsham, John A. Barrick, Connie Weaver
Posted Date:
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