Suppose an employer has a project that yields $$400,000$ of net income in odd years and $$100,000$ of net operating losses in even years.

The employer wants to hire Mr$.$X$.$ However, Mr$.$X demand a salary of $$75,000$ per year and Mr$.$X$$s tax rate is $35\%$ in both situations because of his other income.

There are six situations:

$1.$ Employer is a corporation and they have a tax rate of $21\%$ when the company has net income and $0\%$ when a company has a net loss

$2.$ Employer is a corporation and they have a tax rate of $21\%$ and NOLs can be carried back two$-$years

$3.$ Employer is a corporation and they have a tax rate of $21\%$ and NOLs can be carried forward indefinitely.

$4.$ Employer is a flow$-$through entity and they have a tax rate of $35\%$ when the company has net income and $0\%$ when a company has a net loss

$5.$ Employer is a flow$-$through entity and they have a tax rate of $35\%$ and NOLs can be carried back two$-$years

$6.$ Employer is a flow$-$through entity and they have a tax rate of $35\%$ and NOLs can be carried forward indefinitely.

There are $3$ questions:

$1.$ What is the true cost to the employer if Mr$.$X is hired? Also, Mr$.$X$$s employment contract is in increments of $2$ years $($i$.$e$.,2,4,6,$ etc.$).$

$2.$ What amount of after$-$tax income is Mr$.$X demanding in both situations?

$3.$ What alternative strategy might the employer and Mr$.$X negotiate whereby one or both $($employer and Mr$.$X$)$ are better off but neither is worse off?

Consider the following notes:

Note $1$: To do a complete analysis and be able to compare alternatives, you may need to add a $7$th year in some situations.

Note $2$: In solving this case, I suggest that you use Excel

Please solve this case, for each of the $6$ situations solve the $3$ questions mentioned. Do not foget to consider the notes given.

for all the situations, can you solve first question in excel format for all the years and make sure the total true cost to employer is matchign what you mentioned above