Oregon Co.‘s employees are eligible for retirement with benefits at the end of the year in which both age 60 is attained and they have completed 35 years of service. The benefits provide 15 years reimbursement for health cate services of $35,000 annually, beginning one year from the date of retirement. Ralph Young was hired at the beginning of 2000 by Oregon after turning age 22 and is expected to retire at the end 2038 (age 60). The discount rate is 5%. The plan is I funded PVOA $1 n=15 I=5% 10.37966 PV $1 n=2 i= 5% is .90703 With respect to Ralph
Oregon Co.‘s employees are eligible for retirement with benefits at the end of the year in which both age 60 is attained and they have completed 35 years of service. The benefits provide 15 years reimbursement for health cate services of $35,000 annually, beginning one year from the date of retirement. Ralph Young was hired at the beginning of 2000 by Oregon after turning age 22 and is expected to retire at the end 2038 (age 60). The discount rate is 5%. The plan is I funded PVOA $1 n=15 I=5% 10.37966 PV $1 n=2 i= 5% is .90703 With respect to Ralph
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Oregon Co.‘s employees are eligible for retirement with benefits at the end of the year in which both age 60 is attained and they have completed 35 years of service. The benefits provide 15 years reimbursement for health cate services of $35,000 annually, beginning one year from the date of retirement.
Ralph Young was hired at the beginning of 2000 by Oregon after turning age 22 and is expected to retire at the end 2038 (age 60). The discount rate is 5%. The plan is I funded
PVOA $1 n=15 I=5% 10.37966
PV $1 n=2 i= 5% is .90703
With respect to Ralph, what is Oregon’s expected postretirement benefit obligation at the end of 2036, rounded to the nearest dollar?
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