Bob, an employee of Modern Corp., receives a fringe benefit (in lieu of a salary increase) of $1,000. Bob is in a 32% tax bracket. The fringe benefit is nontaxable to Bob. If he had instead paid for the benefit out of his own money, the cost would not be deductible. Bob's after- tax savings from receiving the tax- free benefit is

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The Answer of Bob, an employee of Modern Corp., receives a fringe benefit (in lieu of a salary increase) of $1,000. Bob is in a 32% tax bracket. The fringe benefit is nontaxable to Bob. If he had instead paid for the benefit out of his own money, the cost would not be deductible. Bob's after- tax savings from receiving the tax- free benefit is

Bob, an Employee of Modern Corp