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You are given the choice of $4,000 in extra taxable income per year or a tax-exempt medical policy. The medical policy costs $300 per month.

You are given the choice of $4,000 in extra taxable income per year or a tax-exempt medical policy. The medical policy costs $300 per month. Your tax rate is 25%. Considering financial factors only, should you take the cash or the medical policy? Explain your decision.

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