Lu is 26 years old and single with a master's degree in education. he is paralyzed and confined to a wheel chair as a result of an auto accident. he earns $32,000 per year. instead of the tradition "one benefit package fits all," the company is allocating an additional 25 percent of each employee's annual pay to be used for discretionary benefits. those benefits and their annual cost are as follows: a) supplementary health care for employee: plan A (no deductible and pays 90 percent) =$3000, plan B ($200 deductible and pays 80 percent)=$2000, plan C ($1000 deductible and pays 70 percent)=$500, s supplementary health care for dependents (same deductibles and percentages as above): plan A=$2000, Plan B=$1500, plan C=$500, supplementary dental plan =$500, life insurance: plan A ($25000 coverage)=$500, plan B (50,000 coverage)= $1000, plan C(100,000 coverage) =$2000, plan D ($250000 coverage)= $3000 mental health plan =$500, prepaid legal assistance =$300, vacation =2 percent of annual pay for each week, up to 6 weeks a year, pension at retirement equal to approximately 50 percent of final annual earnings =$1500, 4-day workweek during 3 summer months (available only to full-time employees) = 4 percent of annual pay. what is the flexible benefit package that consumes 25 percent (and no more) of it'scharacter's pay

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Lu is 26 years old and single with a master's degree in education. he is paralyzed and confined to a wheel chair as a result of an auto accident. he earns $32,000 per year. instead of the tradition "one benefit package fits all," the company is allocating an additional 25 percent of each employee's annual pay to be used for discretionary benefits. those benefits and their annual cost are as follows: a) supplementary health care for employee: plan A (no deductible and pays 90 percent) =$3000, plan B ($200 deductible and pays 80 percent)=$2000, plan C ($1000 deductible and pays 70 percent)=$500, s supplementary health care for dependents (same deductibles and percentages as above): plan A=$2000, Plan B=$1500, plan C=$500, supplementary dental plan =$500, life insurance: plan A ($25000 coverage)=$500, plan B (50,000 coverage)= $1000, plan C(100,000 coverage) =$2000, plan D ($250000 coverage)= $3000 mental health plan =$500, prepaid legal assistance =$300, vacation =2 percent of annual pay for each week, up to 6 weeks a year, pension at retirement equal to approximately 50 percent of final annual earnings =$1500, 4-day workweek during 3 summer months (available only to full-time employees) = 4 percent of annual pay. what is the flexible benefit package that consumes 25 percent (and no more) of it'scharacter's pay

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