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Bill Mason is considering two job offers. Job 1 pays a salary of $34,600 with $5,695 of nontaxable employee benefits. Jo...

Bill Mason is considering two job offers. Job 1 pays a salary of $34,600 with $5,695 of nontaxable employee benefits. Job 2 pays a salary of $35,500 and $4,675 of nontaxable benefits. Use a 28 percent tax rate. (a) Calculate the monetary value of each job. (Round your final answers to the nearest whole number.) (b) Which position would have the higher monetary value? Job 2 Job 1

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Answer #1

The monetary value of each job is computed as shown below:

Monetary value of Job 1 is computed as follows:

= $ 34,600 + $ 5,695 / ( 1 - 0.28 )

= $ 42,510 Approximately

Monetary value of Job 2 is computed as follows:

= $ 35,500 + $ 4,675 / ( 1 - 0.28 )

= $ 41,993 Approximately

b. So Job 1 has a higher monetary value

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