The pension manager at Sunland Town Gardens estimates that retiree benefits of $749000 per year will be paid starting 12 years from today. Payments are estimated to be made for 20 years. Assuming an 14% interest rate, what is the closest value of the pension obligation today? O $9544874 O $776472 O $1173807 O $4960721
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- Amount of an Annuity John Goodheart wishes to provide for 6 annual withdrawals of 3,000 each beginning January 1, 2029. He wishes to make 10 annual deposits beginning January 1, 2019, with the last deposit to be made on January 1, 2028. Required: If the fund earns interest compounded annually at 10%, how much is each of the 10 deposits?If 90,000 is invested in a fund on December 31, 2019, and 5 equal annual withdrawals of 23,138.32 are made starting on December 31, 2020, that will deplete the fund, what is the interest rate being earned if interest is compounded annually?Using the information provided, what transaction represents the best application of the present value of an annuity due of $1? A. Falcon Products leases an office building for 8 years with annual lease payments of $100,000 to be made at the beginning of each year. B. Compass, Inc., signs a note of $32,000, which requires the company to pay back the principal plus interest in four years. C. Bahwat Company plans to deposit a lump sum of $100.000 for the construction of a solar farm In 4 years. D. NYC Industries leases a car for 4 yearly annual lease payments of $12,000, where payments are made at the end of each year.
- Pinecone Company has plan assets of 500,000 at the beginning of the current year and expects to earn 12% on its plan assets during the year. Pinecones service cost is 230,000, and its interest cost is 55,000. Compute Pine-cones pension expense for the current year.To insure you, Assurances Nochance Ltd offers the following plan: you will pay 20 annual payments of $8,000 starting one year from today. Then, in year 21, you or your heirs will receive a pension for the following 15 years. The discount rate used by the company to calculate your pension is 6%. (a) What is the size of your annual pension? (b) Ifyoucouldtakeaone‐timelumpsumpayment25yearsfromtodayinsteadofthepension,how high would the equivalent lump sum payment have to be?.Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.5% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2010 and is expected to retire at the end of 2044 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $88,000 at the end of 2024 and the company's actuary projects her salary to be $270,000 at retirement. The actuary's discount rate is 6%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) At the beginning of 2025, the pension formula was amended to: 1.65% × Service years × Final year's salary The amendment was made retroactive to apply the increased benefits to prior service years. Required: What is the company's prior service cost at the beginning of 2025 with respect to Davenport after the amendment described above? Since the amendment occurred at the…
- Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.5% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2010 and is expected to retire at the end of 2044 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $88,000 at the end of 2024 and the company's actuary projects her salary to be $270,000 at retirement. The actuary's discount rate is 6%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) At the beginning of 2025, the pension formula was amended to: 1.65% × Service years × Final year's salary The amendment was made retroactive to apply the increased benefits to prior service years. Required: What is the company's prior service cost at the beginning of 2025 with respect to Davenport after the amendment described above? Since the amendment occurred at the…Sachs Brands’s defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service years × final year’s salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2010 and is expected to retire at the end of 2044 after 35 years’ service. Her retirement is expected to span 18 years. Davenport’s salary is $90,000 at the end of 2024 and the company’s actuary projects her salary to be $240,000 at retirement. The actuary’s discount rate is 7%. At the beginning of 2025, changing economic conditions caused the actuary to reassess the applicable discount rate. It was decided that 8% is the appropriate rate. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Calculate the effect of the change in the assumed discount rate on the PBO at the beginning of 2025 with respect to Davenport. Note: Do not round intermediate calculations. Round your final answer to…Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2010 and is expected to retire at the end of 2044 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $90,000 at the end of 2024 and the company's actuary projects her salary to be $240,000 at retirement. The actuary's discount rate is 7%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1.What is the company’s projected benefit obligation at the beginning of 2024 (after 14 years’ service) with respect to Davenport? Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar. 2.Estimate by the projected benefits approach the portion of Davenport’s annual retirement payments attributable to 2024…
- Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.4% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2010 and is expected to retire at the end of 2044 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $92,000 at the end of 2024 and the company's actuary projects her salary to be $290,000 at retirement. The actuary's discount rate is 6%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Estimate by the accumulated benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2024. What is the company's accumulated benefit obligation at the end of 2024 with respect to Davenport? Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar. If no estimates are changed…Sachs Brands defined benefit pension plan specifies annual retirement benefits equal to: 1.6% × service years× final year’s salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginningof 2004 and is expected to retire at the end of 2038 after 35 years’ service. Her retirement is expected to span18 years. Davenport’s salary is $90,000 at the end of 2018 and the company’s actuary projects her salary to be$240,000 at retirement. The actuary’s discount rate is 7%.At the beginning of 2019, the pension formula was amended to:1.75% × Service years × Final year’s salaryThe amendment was made retroactive to apply the increased benefits to prior service years.Required:1. What is the company’s prior service cost at the beginning of 2019 with respect to Davenport after the amendment described above?2. Since the amendment occurred at the beginning of 2019, amortization of the prior service cost begins in2019. What is the prior service cost amortization that would be…Sachs Brands defined benefit pension plan specifies annual retirement benefits equal to: 1.6% × service years× final year’s salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginningof 2004 and is expected to retire at the end of 2038 after 35 years’ service. Her retirement is expected to span18 years. Davenport’s salary is $90,000 at the end of 2018 and the company’s actuary projects her salary to be$240,000 at retirement. The actuary’s discount rate is 7%.Required:1. Draw a time line that depicts Davenport’s expected service period, retirement period, and a 2018 measurement date for the pension obligation.2. Estimate by the projected benefits approach the amount of Davenport’s annual retirement payments earned asof the end of 2018.3. What is the company’s projected benefit obligation at the end of 2018 with respect to Davenport?4. If no estimates are changed in the meantime, what will be the company’s projected benefit obligation at theend of 2021…