Martha, an employee of Beneficial Corporation, receives an annual salary of $60,000. Beneficial has a cafeteria plan that allows all employees to select an amount equal to 7 percent of their annual...

Martha, an employee of Beneficial Corporation, receives an annual salary of $60,000. Beneficial has a cafeteria plan that allows all employees to select an amount equal to 7 percent of their annual salary from a menu of nontaxable fringe benefits or receive the cash. Martha selects $45,000 of group term life insurance that costs the company $400 and also selects health insurance that costs the company $1,600; she takes the remaining $2,200 in cash. How much income does Martha recognize from Beneficial Corporation?

a. $60,000

b. $62,200

c. $63,800

d. $64,200