Selko's current salary is $94,500. Her marginal tax rate is 32 percent, and she fancles European sports cars. She purchases a new auto each year. Selko is currently a manager for Idaho Office Supply. Her friend, knowing of her Interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays only $84,200 per year, but it allows employees to purchase one new car per year at a discount of $21,400. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Selko as an employee, Idaho Office Supply offers her a $18,200 raise. Answer the following questions about this analysis. Problem 12-41 Part c (Algo) c. What salary would Selko 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? (Round your Intermediate computations to the nearest dollar amount.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Problem 12-41 (LO 12-3) (Algo)
[The following information applies to the questions displayed below.]
Seiko's current salary is $94,500. Her marginal tax rate is 32 percent, and she fancies European sports cars. She
purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. Her friend, knowing of her interest
in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays only
$84,200 per year, but it allows employees to purchase one new car per year at a discount of $21,400. This discount
qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a
$18,200 raise. Answer the following questions about this analysis.
Problem 12-41 Part c (Algo)
c. 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? (Round your intermediate computations
to the nearest dollar amount.)
Salary needed
Transcribed Image Text:Required Information Problem 12-41 (LO 12-3) (Algo) [The following information applies to the questions displayed below.] Seiko's current salary is $94,500. Her marginal tax rate is 32 percent, and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays only $84,200 per year, but it allows employees to purchase one new car per year at a discount of $21,400. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $18,200 raise. Answer the following questions about this analysis. Problem 12-41 Part c (Algo) c. 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? (Round your intermediate computations to the nearest dollar amount.) Salary needed
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