Vernon Inc

question 11

Essay

Vernon Inc.needs an additional worker on a multiyear project.Vernon could either hire an employee for a $70,000 annual salary or engage an independent contractor for a $75,000 annual fee.If Vernon's marginal income tax rate is 34%,which option minimizes the after-tax cost of obtaining the worker?

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Definitions:

Attitudes

A settled way of thinking or feeling about something, typically reflected in a person's behavior.

Influenced

The effect or impact one person, group, or factor has on another's attitudes, beliefs, or actions.

Sleeper Effect

The phenomenon whereby people can remember a message but forget where it came from; thus, source credibility has a diminishing effect on attitudes over time.

Source Credibility

The degree to which the audience perceives a message’s source as expert and trustworthy.