The number needed from
Exhibit12-8 is .09
Homework Answers
Part a-1
Option B
Package 2 offers $82000 annual salary plus health and life insurance benefits
Jill is better off by $12490 (57910-45420) by choosing option 2
|
Option 1 |
Option 2 |
|
|
Salary |
94000 |
82000 |
|
Includible health insurance |
0 |
0 |
|
Includible life insurance |
162 |
|
|
Includible parking |
3000 |
|
|
Includible flight benefits |
||
|
BTCF from salary |
94000 |
85162 |
|
(1-32%) |
(1-32%) |
|
|
ATCF from salary |
63920 |
57910 |
|
Cost of health insurance |
(3000) |
|
|
Cost of parking |
(5500) |
|
|
Cost of life insurance |
(3000) |
|
|
Cost of flight benefits |
(7000) |
|
|
After-tax dollars |
$45420 |
$57910 |
Includible life insurance =(200000-50000)*0.09*12 = 162000/1000 = $162
Includible parking =(520-270)*12 =3000
Part a-2
|
After tax dollars |
$12490 |
Part b-1
Option A
Package 1 offers $121000 annual salary with no qualified fringe benefits
Jill is better off by $5870 (63780-57910) by choosing option 1
|
Option 1 |
Option 2 |
|
|
Salary |
121000 |
82000 |
|
Includible health insurance |
0 |
0 |
|
Includible life insurance |
162 |
|
|
Includible parking |
3000 |
|
|
Includible flight benefits |
||
|
BTCF from salary |
121000 |
85162 |
|
(1-32%) |
(1-32%) |
|
|
ATCF from salary |
82280 |
57910 |
|
Cost of health insurance |
(3000) |
|
|
Cost of parking |
(5500) |
|
|
Cost of life insurance |
(3000) |
|
|
Cost of flight benefits |
(7000) |
|
|
After-tax dollars |
$63780 |
$57910 |
Includible life insurance =(200000-50000)*0.09*12 = 162000/1000 = $162
Includible parking =(520-270)*12 =3000
Part b-2
|
After tax dollars |
$5870 |
Add Answer to:
The number needed from
Exhibit12-8 is .09
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