On January 1, 2013, Medical Transport Companys accumulated postretirement benefit obligation was $25 million. At the end of 2013, retiree
On January 1, 2013, Medical Transport Company’s accumulated postretirement benefit obligation was $25 million. At the end of 2013, retiree benefits paid were $3 million. Service cost for 2013 is $7 million. Assumptions regarding the trend of future health care costs were revised at the end of 2013, causing the actuary to revise downward the estimate of the APBO by $1 million. The actuary’s discount rate is 8%. Determine the amount of the accumulated postretirement benefit obligation at December 31, 2013.
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...
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