McGwire Company's Pension Fund Projects That Most of Its Employees

question 9

Multiple Choice

McGwire Company's pension fund projects that most of its employees will take advantage of an early retirement program the company plans to offer in 5 years.Anticipating the need to fund these pensions,the firm bought zero coupon U.S.Treasury Trust Certificates maturing in 5 years.When these instruments were originally issued,they were 12% coupon,30-year U.S.Treasury bonds.The stripped Treasuries are currently priced to yield 10%.Their total maturity value is $6,000,000.What is their total cost (price) to McGwire today?

• A)$3,366,714
• B)$3,453,040
• C)$3,541,580
• D)$3,632,390
• E)$3,725,528

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Definitions:

Tallman Lettering

The practice of using mixed case letters to help distinguish look-alike, sound-alike drugs to reduce medication errors.

Medication Errors

Mistakes in prescribing, dispensing, or administering medication that can lead to harmful effects.

Institute for Safe Medication Practices

An independent, nonprofit organization devoted to preventing medication errors and promoting safe medication use.

Point of Care

Involves medical testing or treatment provided at the time and location of patient care, enhancing decision-making and outcomes.