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A company is conducting an investigation into potential financial fraud by one of its employees. The forensic accountant has obtained the employee's bank statements for

A company is conducting an investigation into potential financial fraud by one of its employees. The forensic accountant has obtained the employee's bank statements for the past year and has identified several suspicious transactions. The employee's salary is $75,000 per year and their bank balance at the beginning of the year was $10,000. The forensic accountant has estimated that the employee's personal expenses for the year were $40,000. The employee has reported no other sources of income. Based on the bank statements, the forensic accountant has identified $50,000 in cash deposits that cannot be accounted for by the employee's salary or any other legitimate source of income.

a) What is the employee's total income for the year, including the suspicious deposits?

b) What is the employee's total taxable income for the year, assuming a tax rate of 25%?

c) If the company decides to pursue legal action against the employee for financial fraud, what is the maximum amount of damages the company could claim, assuming all of the suspicious deposits are deemed to be the result of fraud?

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