Bob,an Employee of Modern Corp

question 42

Multiple Choice

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

• A)$0.
• B)$320.
• C)$680.
• D)$1,000.

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Definitions:

Positive Reference Group

A group to which an individual aspires or looks up to, which positively influences their behavior and attitudes.

Conforming Norm

A rule or standard of behavior that individuals in a society are expected to follow in order to fit in or be accepted by the group.

Expressed Attitudes

Opinions or stances that individuals openly communicate to others through verbal or non-verbal means.

Voluntary Adherence

The act of willingly following or committing to a policy, rule, or guideline.