2. (5 points) Nerwin, Inc. is a furniture
manufacturing company with 50 employees. Recently, after a long
negotiation with the local labor union, the company decided to
initiate a pension plan as a part of its compensation plan. The
plan will start on January 1, 2014. Each employee covered by the
plan is entitled to a pension payment each year after retirement.
On the basis of a discussion with the supervisor of the Personnel
Department and an actuary from an insurance company, the controller
develops the following information related to the pension
plan.Average length of time to retirement10 yearsExpected life
duration after retirement15 yearsTotal pension payment expected
each year after retirement for all employees. Payment made at the
end of the year. Amount includes all employees.$300,000 per yearThe
interest rate to be used is 7%.Required:Calculate the present value
of this deferred annuity (at January 1, 2014).
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ANSpresent yalue of de fermed annuity far jag-1-2014); $2382,80589. werkings: PV - $300000 x PYIF (74., 15 years = $ 300000 x 7.942686 = $ 2382805084
2. (5 points) Nerwin, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long negotiation wi...
2. (5 points) Nerwin, Inc. is a furniture
manufacturing company with 50 employees. Recently, after a long
negotiation with the local labor union, the company decided to
initiate a pension plan as a part of its compensation plan. The
plan will start on January 1, 2014. Each employee covered by the
plan is entitled to a pension payment each year after retirement.
On the basis of a discussion with the supervisor of the Personnel
Department and an actuary from an...
2. (5 points) Nerwin, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long negotiation with the local labor union, the company decided to initiate a pension plan as a part of its compensation plan. The plan will start on January 1, 2014. Each employee covered by the plan is entitled to a pension payment each year after retirement. On the basis of a discussion with the supervisor of the Personnel Department and an actuary from an...
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