Question: Selko's current salary is $ 1 0 6 , 0 0 0 . Her marginal tax rate is 3 2 percent, and she fancles European
Selko's current salary is $ Her marginal tax rate is percent, and she fancles European sports cars. She purchases a new
auto each year. Selko is currently a manager for Idaho Office Supply. Her frlend, knowing of her Interest in sports cars, tells her about a
manager position at the local BMW and Porsche dealer. The new position pays $ 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 Selko as an
employee, Idaho Office Supply offers her a $ ralse. Answer the following questions about this analysis.
Requlred:
What is the annual aftertax cost to Idaho Office Supply If It provides Selko wlth the $ Increase In salary?
Note: Ignore payroll taxes.
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
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
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
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.
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