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The last person answered this incorrectly: a - 78876 b - 93600 In 2014, Jill, age 35, received a job offer with two alternative compensation
The last person answered this incorrectly:
a - 78876
b - 93600
In 2014, Jill, age 35, received a job offer with two alternative compensation packages to choose from. The first package offers her $114,000 annual salary with no qualified fringe benefits, requires her to pay $5,000 a year for parking, and will purchase life insurance at a cost of $1,650. The second package offers $104,000 annual salary, employer-provided health insurance, annual free parking (worth $325 per month), $212,000 of life insurance (purchasing on her own would have been $1,650 annually), and free flight benefits (she figures that it will save her $6,150 per year). If Jill chooses the first package, she would purchase health and life insurance benefits at $6,050 and $1,650, respectively, annually after taxes and spend another $6,150 in flights while traveling. Assume her marginal tax rate is 28 percent. (Use Exhibit 12-10.) a-1. Which compensation package should she choose? Package 1 offers her $114,000 annual salary with no qualified fringe benefits. O Package 2 offers $104,000 annual salary plus health and life insurance benefits. 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.) fter-tax dollar b-1. Assume the first package offers $130,000 salary with no qualified benefits instead of $114,000 salary plus benefits. Which compensation package should she choose? O Package 1 offers her $130,000 annual salary with no qualified fringe benefits. O Package 2 offers $104,000 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.) fter-tax dollarStep by Step Solution
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