What is the annual after-tax cost to idaho office supply

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Question - Seiko's current salary is $85,500. 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, Inc. 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 $72,000 per year, but it allows employees to purchase one new car per year at a discount of $16,600. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply, Inc. offers her a $7,500 raise. Answer the following questions about this analysis.

Required - What is the annual after-tax cost to Idaho Office Supply, Inc. if it provides Seiko with the $7,500 increase in salary?

Reference no: EM133148551

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