Lars Osberg, a single taxpayer with a 35 percent marginal tax rate, desires health insurance. Volvo, his employer, has a 21 percent marginal tax rate. The health insurance will cost Lars $8,500 to purchase if he pays for it himself through the health exchange (Lars’s AGI is too high to receive any tax deduction for the insurance as a medical expense). Answer the following questions about this benefit. (Do not round intermediate computations. Round your final answer to the nearest whole dollar amount.)

b. What would be the after-tax cost to Volvo to provide Lars with health insurance if it could purchase the insurance through its group plan for $5,000?

c. Assume that Volvo could purchase the insurance for $5,000. Lars is interested in getting health insurance, and he is willing to receive a lower salary in exchange for the health insurance. What is the least amount by which Volvo would be willing to reduce Lars’s salary while agreeing to pay his health insurance?