You expect to drive 16,000 personal kilometers, and 40,000 work kilometers per year. Your personal car cost $40,000 (including $2,500 tax), operating costs are $0.40 per kilometer, and your marginal tax rate is 33%. You are provided the following options, explain which you would prefer (calculate after tax cash). 

1. Use your own car and receive an allowance of $0.62 per kilometer. 

2. Use your own car and receive an allowance of $2,100 per month. 

3. Use the company car that has a cost of $50,000 (market value of $35,000), and the company pays all the operating costs

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To determine the most financially advantageous option we need to calculate the aftertax cash for eac... View the full answer