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. Compute the annual after-tax cost of each option and indicate which minimizes the after-tax cost of obtaining the worker. (Round all your intermediate calculations to the nearest whole dollar amount.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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.

Compute the annual after-tax cost of each option and indicate which minimizes the after-tax cost of obtaining the worker. (Round all your intermediate calculations to the nearest whole dollar amount.)

 

 

This was a homework question that I missed. Could you please help me figure out what I did wrong?

My answer: After-tax cost of employee: $51,350

                   After-tax cost of independent contractor: $56,880

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