Answered

At Westonci.ca, we connect you with the best answers from a community of experienced and knowledgeable individuals. Discover a wealth of knowledge from professionals across various disciplines on our user-friendly Q&A platform. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.

In 2009, Khalid was in an automobile accident and suffered physical injuries. The accident was caused by Rashad's negligence. Khalid threatened to file a lawsuit against Amber Trucking Company, Rashad's employer, claiming $50,000 for pain and suffering, $25,000 for loss of income, and $100,000 in punitive damages. Amber's insurance company will not pay punitive damages; therefore, Amber has offered to settle the case for $120,000 for pain and suffering, $25,000 for loss of income, and nothing for punitive damages. Khalid is in the 35% marginal tax bracket. What is the after-tax difference to Khalid between Khalid's original claim and Amber's offer

Sagot :

Tundexi

Answer:

$5,000

Explanation:

Amber offer = 120,000 + 25,000 = $145,000

Original claim = ($50,000 + $25,000) + [$100,000 × (1 - 0.35) = $140,000

Difference = $145,000 - $140,000 = $5,000

So, the after-tax difference to Khalid between Khalid's original claim and Amber's offer is $5,000

Thanks for stopping by. We are committed to providing the best answers for all your questions. See you again soon. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Keep exploring Westonci.ca for more insightful answers to your questions. We're here to help.