Trent, Incorporated needs an additional worker on a multiyear project. It could hire an employee for a $65,000 annual salary. Alternatively, it could engage an independent contractor for a $72,000 annual fee. Trent's income tax rate is 21 percent. Required: Compute the annual after-tax cost of each option and indicate which minimizes the after-tax cost of obtaining the worker. Note: Round all your intermediate calculations to the nearest whole dollar amount. After-tax cost of employee $ After-tax cost of independent contractor $ Option that minimizes after-tax cost 55,279 56,800
Trent, Incorporated needs an additional worker on a multiyear project. It could hire an employee for a $65,000 annual salary. Alternatively, it could engage an independent contractor for a $72,000 annual fee. Trent's income tax rate is 21 percent. Required: Compute the annual after-tax cost of each option and indicate which minimizes the after-tax cost of obtaining the worker. Note: Round all your intermediate calculations to the nearest whole dollar amount. After-tax cost of employee $ After-tax cost of independent contractor $ Option that minimizes after-tax cost 55,279 56,800
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 5TP: You own a construction company and have recently received a contract with the local school district...
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