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5. Barbara was injured in an automobile accident. She has threatened to file a suit against the other party involved in the accident and has

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5. Barbara was injured in an automobile accident. She has threatened to file a suit against the other party involved in the accident and has proposed the following settlement: Damages for 25% loss of the use of her right am $200,000 Medical expenses 30,000 Loss of wages 10,000 Punitive damages 100.000 $340,000 The defendant's insurance company is reluctant to pay punitive damages. Also, the company disputes the amount of her loss of wages amount. Instead, the company offers to pay her $300,000 for damages to her arm and $30,000 medical expenses. Assume Barbara is in the 35% marginal tax bracket. What will her after-tax proceeds from accepting the offer? What would her after-tax proceeds be if she is granted her proposal? So which would be most advantageous to Barbara

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