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6). During the current year, Khalid was in an automobile accident and suffered physical injuries. The accident was caused by Rashad's negligence. Khalid threatened to
6). During the current year, 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, to claim $50,000 for pain and suffering, $90,000 for loss of income, and $70,000 in punitive damages. Amber Trucking Company's insurance company will not pay any punitive damages. Therefore, Amber Trucking Company has offered to settle the case for $100,000 for pain and $90,000 for loss of income. Khalid is in the 35% marginal tax bracket. What is the after-tax difference to Khalid between Khalid's original claim and Amber Trucking Company's offer? 6). During the current year, 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, to claim $50,000 for pain and suffering, $90,000 for loss of income, and $70,000 in punitive damages. Amber Trucking Company's insurance company will not pay any punitive damages. Therefore, Amber Trucking Company has offered to settle the case for $100,000 for pain and $90,000 for loss of income. Khalid is in the 35% marginal tax bracket. What is the after-tax difference to Khalid between Khalid's original claim and Amber Trucking Company's offer
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