Which of the Following Is Not an Element of Pensions

question 19

Multiple Choice

Which of the following is not an element of pensions and other postemployment benefits that is difficult to estimate?

• A)Projected lifetime of former employees that will receive a pension.
• B)The future earnings of employees prior to retiring for defined benefit plans.
• C)Long-term interest rates to discount future costs back to present value.
• D)Current amounts earned on pension plan assets.

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Definitions:

Optimal Upper Cash Limit

The optimal upper cash limit is the maximum amount of cash a company determines it should hold to efficiently manage transactions and emergencies while minimizing holding costs.

Standard Deviation

A statistical measure of the dispersion or variability in a set of values, often used in finance to quantify the risk of an investment's return.

Net Present Value

The gap between the current value of incoming and outgoing cash over a given period.

Lockbox System

A service offered by banks to companies for the receipt of payment from customers, involving the collection of customers' payment checks through a special post office box.