Present value. The State of Confusion wants to change the current retirement policy for state employees. To do so, however, the state must pay the current pension fund members the present value of their promised future payments. There are 240,000 current employees in the state pension fund. The average employee is 18 years away from retirement, and the average promised future retirement benefit is $480,000 per employee. If the state has a discount rate of 7% on all its funds, how much money will the state have to pay to the employees before it can start a new pension plan? How much money will the state have to pay to the employees before it can start a new pension plan? (Round to the nearest dollar.)

Present value. The State of Confusion wants to change the current retirement policy for state employees. To do so, however, the state must pay the current pension fund members the present value of their promised future payments. There are 240,000 current employees in the state pension fund. The average employee is 18 years away from retirement, and the average promised future retirement benefit is $480,000 per employee. If the state has a discount rate of 7% on all its funds, how much money will the state have to pay to the employees before it can start a new pension plan? How much money will the state have to pay to the employees before it can start a new pension plan? (Round to the nearest dollar.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Hw.19.
Several years ago, a man won $27 million in the State Lottery. To pay off the winner, the State planned to make an initial $1 million payment today followed by equal annual payments of $1.3 million at the end of each year for the next 20 years. Just before receiving any money, the man offered to sell the winning ticket back to the State for a one-time immediate payment of $14.4 million. If the State uses a 6%/yr MARR, should the State accept the man’s offer? Use an internal rate of return analysis.
The government has imposed a fine on JJ’s Place. The fine calls for annual payments of $60,000 one year from now, $70,000 two years from now, $75,000 three years from now, and $50,000 four years from now. The government plans to invest the funds until the final payment is collected and then donate the entire amount, including the investment earnings, to help the local community shelter. The government will earn 7.5 percent on the funds held. How much will the community shelter receive four years from today? Group of answer choices $328,572 $236,875 $277,491 $286,057 $281,748
akeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false еВook Problem 9-38 (LO. 6) For the following scenarios, compute the maximum total deductible contribution to a traditional IRA for 2020. Traditional IRA Contribution a. Juan, age 41, earns a salary of $28,000 and is not an active participant in any other qualified plan. His wife, Agnes, has no earned income. Juan wishes to contribute as much as possible to his own IRA. b. Abby, age 29, reports earned income of $25,000, and her husband, Sam, has earned income of $2,600: They are not active participants in any other qualified plan. C. Leo's employer makes a contribution of $3,500 to Leo's simplified employee pension plan. Leo is single, has earned income of $32,000, and has AGI of $29,000. (Previous
The PBO was $100 million at the beginning of the year. Service cost for the year was $12 million. At the end of the year, pension benefits paid by the trustee were $8 million and there were no pension-related OCI account. The actuary's discount rate was 5%. What was the amount fo the PBO at the end of the year? (Enter your answer in million, round to the nearest million, without dollar sign, ex. 123 or -123).
Present value. The State of Confusion wants to change the current retirement policy for state employees. To do so, however, the state must pay the current pension fund members the present value of their promised future payments. There are 230,000 current employees in the state pension fund. The average employee is 16 years away from retirement, and the average promised future retirement benefit is $380,000 per employee. If the state has a discount rate of 4% on all its funds, how much money will the state have to pay to the employees before it can start a new pension plan?
Refer to the financial statements and related disclosure notes of Microsoft Corporation (www.microsoft.com).Required:1. What type of pension plan does Microsoft sponsor for its employees? Explain.2. Who bears the “risk” of factors that might reduce retirement benefits in this type of plan? Explain.3. Assuming that employee and employer contributions vest immediately, suppose a Microsoft employee contributes $1,000 to the pension plan during her first year of employment and directs investments to a bondmutual fund. If she leaves Microsoft early in her second year, after the mutual fund’s value has increased by2%, how much will she be entitled to roll over into an Individual Retirement Account (IRA)?4. How did Microsoft account for its participation in the pension plan in fiscal 2015?
Hi, can someone help me with this please?
None
Check my Stanley Morgan Industries adopted a defined benefit pension plan on April 12, 2021 The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The actual return was also 10% in 2021 and 2022.* A consulting firm, engaged as actuary, recommends 5% as the appropriate discount rate. The service cost is $240,000 for 2021 and $330,000 for 2022. Year-end funding is $250,000 for 2021 and $260,000 for 2022. No assumptions or estimates were revised during 2021. *We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the estimate didn't change, that also was the actual rate in 2022. Required: Calculate each of the following amounts as of both December 31, 2021, and December 31, 2022: (Enter your answers in thousands (1.e., 200,000 should be entered as 200).) December 31, 2021 December 31, 2022 1.…
Please help me. Thankyou.
Please don't provide answer in image format thank you.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS