Question: Trent Inc needs an additional worker on a multiyear project

Trent Inc. needs an additional worker on a multiyear project. It could hire an employee for a $65,000 annual salary. Alternatively, it could engage an independent contractor for a $72,000 annual fee. If Trent’s marginal income tax rate is 34 percent, which option minimizes the after-tax cost of obtaining the worker?

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  • CreatedNovember 03, 2015
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