Which of the following employee benefits has the greater value? (Assume a 25 percent tax rate.) A nontaxable pension contribution of $5,500 or the use of a company car with a taxable value of $7,430. A life insurance policy with a taxable value of $510 or a nontaxable increase in health insurance coverage valued at $370.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section: Chapter Questions
Problem 37P
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Which of the following employee benefits has the greater value? (Assume a 25 percent tax rate.)

  1. A nontaxable pension contribution of $5,500 or the use of a company car with a taxable value of $7,430.
  2. A life insurance policy with a taxable value of $510 or a nontaxable increase in health insurance coverage valued at $370.

     

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