Seiko's current salary is $111,500. Her marginal tax rate is 32 percent, and she fancies European sports cars. Shepurchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. Her friend, knowing of her interestin sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays only$100,300 per year, but it allows employees to purchase one new car per year at a discount of $18,500. This discountqualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a$13,500 raise. Answer the following questions about this analysis.Problem 12-41 Part a (Algo)a. What is the annual after-tax cost to Idaho Office Supply if it provides Seiko with the $13,500 increase in salary? (Ignore payrolltaxes.)Soon toaron and eakb-1. Financially, which offer is better for Seiko on an after-tax basis?O Car dealer's offerO Current employer's offerO Both offersb-2. By how much is the offer better for Seiko on an after tax basis (Assume that Selko is going to purchase the new car whether sheswitches jobs or not)Offer is better byc. What salary would Seiko need to receive from Idaho Office Supply to make her financially indifferent (after taxes) between receivingadditional salary from Idaho Office Supply and accepting a position at the auto dealership? (Round your intermediate computationsto the nearest dollar amount.)Salary needed

a) After-tax cost = 13,500 - (13,500*32%)= 9,180(b. 1) Option B; Current employer's offer

Answered: a. What is the annual after-tax cost to…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Problem Information Use the following tax rates, celling and maximum taxes: Employee and Employer OASDI: 6.20% $137,700 $8,537.40 Employee and Employer HI: 1.45% No limit No maximum Self-employed OASDI: 12.4% $137,700 $17,074.80 Self-employed HI: 2.9% No limit No maximum "Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed. Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows: 1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-haif to determine the overtime rate). 2. If the third decimal place is 5 or more, round to the next higher cent. 3. If the third decimal place is less than 5, drop the third decimal place. Also, use the minimum hourty wage of $7.25 in solving these problems and all that follow. Jax Company's (a monthly depositor) tax lability (amount withheld from…
Based on the following data, calculate the items requested: Buying Costs Annual mortgage payments Property taxes Down payment/closing costs Growth in equity Insurance/maintenance Estimated annual appreciation Rental Costs Annual rent Insurance Security deposit $ 8,230 $ 230 $ 1,075 Assume an after-tax savings interest rate of 7 percent and a tax rate of 32 percent. Assume this individual has other tax deductions that exceed the standard deduction amount. Rental cost Buying cost a. Calculate total rental cost and total buying cost. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) $ 10,450 (10,000 is interest) $ 2,120 $ 5,150 $ 450 $1,900 $ 2,550 b. Would you recommend buying or renting? O Renting O Buying
Use the following tax rates, ceiling and maximum taxes: Employee and Employer OASDI: 6.20% $137,700 $8,537.40 Employee* and Employer HI: 1.45% No limit No maximum Self-employed OASDI: 12.4% $137,700 $17,074.80 Self-employed HI: 2.9% No limit No maximum *Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed. Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows: Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the overtime rate). If the third decimal place is 5 or more, round to the next higher cent. If the third decimal place is less than 5, drop the third decimal place. Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. Dee is paid $2,345 on November 8, 20--. Dee had cumulative gross earnings, including…
Question 18 Sean was negotiating his salary and benefit package with South Beach Hospital. First, South Beach offered Sean a salary of $75,000. Sean and his wife, Rachelle, had a baby last year and were paying $2,000 per month for day care costs. Assume their daycare costs have no tax benefit, Knowing the hospital had an onsite daycare, Sean asked South Beach for a salary of $60,000 and fully paid daycare at their on-site daycare. If Sean and Rachelle are in the 25% tax bracket, what is their after-tax savings per year if South Beach agrees to Sean's request? C A) $6,750 C B) $24,000 C C) $12,75so C D) $18,750
If a man earns a salary of $34,892 a year and is paid weekly, how much is his weekly paycheck before taxes? The man earns $ weekly before taxes. (Round to the nearest cent as needed.)
Jose must choose between two job offers. The first job pays $62,000 for the first year. Each year thereafter, he would receive a raise of $2400. A second job offers $66,000 the first year with a raise of $2000 each year thereafter. However, with the second job, Jose would have to pay $150 per month out of his paycheck for health insurance. Part: 0 / 2 Part 1 of 2 (a) If Jose anticipates working for the company for 6 years, find the total amount he would earn from each job. Jose would earn $ over 6 years from the first job, or a total of $ from the second job.
2-3 Computing Graduated State Income Tax Rather than a flat percentage rate, some states have what is known as a graduated income tax. This means that your state income tax is computed at a varying rate each time you reach a new income level. The higher your income, the greater your tax. Example Find the amount of state income tax deducted from each paycheck. Carla Erpelding's annual salary is $28,500. She is paid biweekly. Her personal exemptions total $1,500. The state income tax is calculated on the following graduated basis: 2.5 percent of the first $25,000 and 3.5 percent over $25,000. 1. Find the taxable wages. - ($28,500 $1,500) = $27,000 2. Find the annual tax withheld. First $25,000: = ($25,000 x .025) = $625 Over $25,000 = ($27,000-$25,000) x .035 = $2,000 x .035 = $70 Annual Tax = $625+ $70 = $695 3. Find the tax per period. Annual Tax Number of Pay Periods per Year = Tax Withheld per Pay Period $695.00 ÷ 26 = $26.73 tax per pay period Practice Using the following graduated…
Using the Train act shown below, how much annual tax will be paid by a salesman who earns a basic salary of Php. 450,000.00 per year plus a commission of 20% if he sold over Php. 30,000? Assuming the salesman was able to sell Php. 50,000 regularly per month. He has a total deduction of Php. 70,000 per year. What is his monthly tax deduction?
You have to decide whether or not to participate in the employer match program at your work. If you place 8% of your gross pay into a retirement account, your employer will match it. You plan to retire in 30 years. You expect to earn 6% return on your investment. How much will you have in the account if your average annual gross salary is $50,000? A. $316,232.80 B. $22,973.96 C. $45,947.92 D. $632,465.60 Using the same information as the previous question, assume that you want to increase your portion of the contribution to 10%. The employer will only match up to 8%. How much would you have in this situation? A. $692,523.80 B. $711,523.80 C. $316,232.80 D. $632,465.60
Given the following tax structure: Total tax Salary $ 10,000 $ 20,000 Тахрayer Mae $ 600 Pedro ??? a. What is the minimum tax that Pedro should pay to make the tax structure vertically equitable based on the tax rate paid? (Round your final answer to nearest whole dollar amount.) Minimum tax b. This would result in what type of tax rate structure? Tax rate structure Progressive
Your employer asks you to consult on the better approach to a decision. What should the corporation pay for an asset that will return them $150,000 at the end of year 1, then zero in year 2, then $400,000 in years 3 & 4, then zero in year 5, then $200,000 in years 6-10, assuming their discount rate is 3% (ignoring taxes) ?
You have been hired for your dream job in healthcare. Your salary is $10,000 per month. Your taxes are $2500 per month. Your rent, food and transportation are a total $5000 per month. How much is your gross income? How much is your disposable income? What is another more common word for disposable income? How much is your discretionary income? Give me one example of what you would use your discretionary income for and how much you'd spend on that item?

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