Grace was awarded $70,000 in a lawsuit against XYZ Furniture after her chair broke. If court costs total $85,000, how much out-of-pocket expense will XYZ Furniture incur?

In this scenario, the out-of-pocket expense that XYZ Furniture will incur relates specifically to the cost of the lawsuit itself, not the amount awarded to Grace. The awarded sum of $70,000 represents the damages Grace is entitled to recover from XYZ Furniture, but this amount does not constitute an out-of-pocket expense for the company at the time of the award.

Out-of-pocket costs typically refer to actual cash or expenses that must be paid directly by XYZ Furniture. In this case, since the court costs total $85,000 and the company is not required to pay these costs in addition to the amount awarded to Grace, the company would incur a total of $0 in out-of-pocket expenses directly tied to this case.

This means that while they may face additional financial implications due to the judgment against them, those implications aren't classified as "out-of-pocket expenses". Therefore, the correct decision reflects the reality that there is no immediate cash outlay by XYZ Furniture that would be recognized as an out-of-pocket expense concerning the court costs.