Katrina's Executive Compensation Package Allows Her to Participate in the Company's

question 76

Essay

Katrina's executive compensation package allows her to participate in the company's nonqualified deferred compensation plan. This year, Katrina defers 20 percent of her $404,000 salary. Katrina's deemed investment choice will earn 8 percent annually on the deferred compensation until she takes a lump-sum distribution in 11 years. Katrina's current marginal tax rate is 24 percent and she expects her marginal tax rate will be 35 percent upon receipt of the deferred salary. What is her after-tax accumulation from the deferred salary in 11 years? (Round future value factors to five decimal places and the future value and final answers to the nearest whole number.)

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Definitions:

Depositary Bank

A financial institution that holds and manages securities for its clients, facilitating the trading of these securities.

Payor Bank

The bank that is directed by a check or draft to pay a certain amount of money to the person or entity named on the check.

On-Us Item

A banking term referring to a check or draft that is presented for payment by the same bank upon which it is drawn.

Stale Check

A check that is not presented to a bank within six months of its date.