Today Is John's 57^th Birthday and He Has Served 14

question 65

Multiple Choice

Today is John's 57^th birthday and he has served 14 years for his firm.John is expected to retire on his 65^th birthday.His firm expects to incur $5,000 of annual net health care claims costs for John beginning one year after his retirement date and continuing each year for a total of seven years (assume seven end of year payments in all) .To be fully eligible for these benefits,John must work 20 years.Compute expected post-retirement benefit obligation for John today if the discount rate is 8%.

• A) $15,244
• B) $12,322
• C) $18,916
• D) $14,064

---

Definitions:

Generic Strategies Model

The Generic Strategies Model is a framework developed by Michael Porter that outlines three strategies organizations can use to achieve competitive advantage: cost leadership, differentiation, and focus.

Focused Cost Leadership

A strategic approach where a company aims to be the lowest-cost producer in a particular niche or segment, offering prices lower than competitors while targeting specific customer groups.

Differentiation

In business, the process of making a product or service distinct from competitors in the market, often by emphasizing unique features or benefits.

BCG Matrix

A strategic business tool designed by the Boston Consulting Group to help organizations analyze their product lines or business units for decision-making purposes.