Many Corporations Are Shifting from Defined Benefit to Defined Contribution

question 188

Multiple Choice

Many corporations are shifting from defined benefit to defined contribution retirement programs.When considering changes to retirement programs,the primary stakeholders are the

• A) shareholders.
• B) employees.
• C) customers.
• D) marketing managers.
• E) competition.

Understand the determination of real and nominal interest rates and their relationship with inflation.

Evaluate the effects of changes in the supply and demand for loanable funds on the interest rate.

Assess the role of inflation in economic decisions and contracts.

Identify strategies for individuals and businesses to mitigate the effects of inflation.

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Definitions:

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and outflows.

Internal Rate of Return

A metric used in capital budgeting to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Time Value

The principle that money currently in hand is valued higher than an identical amount received in the future, owing to its capacity to generate earnings.

Accounting Rate of Return

A financial ratio that measures the expected profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.