Directions Read the following and respond to the questions below Ford Motor Comp

Question

Directions Read the following and respond to the questions below Ford Motor Company is adding over 2,000 new, jobs m their Claycomo Assembly Plant The average wage will be $20 per hour These wages would have a 6% Individual State Income Tax Rate per year In addition. there would be a 1% state unemployment tax rate The Ford.plant.is Clay County where they pay $6,000.000 a year in corporate property taxes New equipment would be added to the plant This would raise the property taxes another $1,000.000 annually. Now every state and country in the U S wants these jobs. As the Missouri State Treasurer how much are you going to give Ford to put those jobs here? How long of a commitment for these jobs would you consider?

Explanation / Answer

The image of the question towards the end is not legible.

As per best judgment the following estimates are offered;

Assume the Ford investment is for at least 25 years New Jobs added 2000 Hourly rate $20 Assume weekly 40 hours work So Weekly wage per person =40*20=                        800 Yearly wages for 52 weeks per person =                  41,600 Yearly wages for 2000 new jobs =         83,200,000 Yearly State Income tax @6%=            4,992,000 Yearly State Unemployment Tax @1% =               832,000 Yearly Property Tax Payment              7,000,000 Total Yearly Expected Tax collection from new facility=         12,824,000 Assume the annual growth rate in wages and property   tax rate and the discount factor =3%. Both nullify each other. So Total PV of Tax collections in 25 years =25*12824000=       320,600,000 So the PV of the benefits that can be offered to Ford over 25 years ia $320,600,000

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