Three employees of the Horizon Distributing Company will receive annual pension payments from the company when they retire. Theemployees will receive their annual payments for as long as they live. Life expectancy for each employee is 14 years beyondretirement. Their names, the amount of their annual pension payments, and the date they will receive their first payment are shownbelow:EmployeeTinkersEversAnnualPayment$ 27,000Date of FirstPayment12/31/202732,00037,00012/31/202812/31/2029ChanceRequired:1. Compute the present value of the pension obligation to these three employees as of December 31, 2024. Assume an 11% interestrate.2. The company wants to have enough cash invested at December 31, 2027, to provide for all three employees. To accumulateenough cash, they will make three equal annual contributions to a fund that will earn 11% interest compounded annually. The firstcontribution will be made on December 31, 2024. Compute the amount of this required annual contribution.Note: For all requirements, use tables, Excel, or a financial calculator. Do not round intermediate calculations. Round your finalanswers to nearest whole dollar amount. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)Answer is complete but not entirely correct.Employee1. TinkersPVS152,9991. Evers$163,3621. Chance$170,1692. Amount of annual contribution$167,181

It is given that 3 equal annual contributions to be madefuture value factor at 11% for 3 years =…

Answered: 2. The company wants to have enough…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Zander Corporation wishes to accumulate $2,000,000 for plant expansion. The funds are required on December 31, 2025. Zander intends to make five equal annual deposits at the beginning of the year in a fund that will earn interest at 8% compounded annually. The first deposit was made on January 1, 2021. What is the amount of the required annual deposit? The required annual deposit is (round up to the nearest dollar):

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