A Company Must Decide Their Contribution to Their Pension Plan

question 6

Multiple Choice

A company must decide their contribution to their pension plan based on the probability distribution of the length of life of their retired employees. Suppose the probability distribution of the lifetimes of their employees is approximately a normal distribution with μ = 74 years and σ = 8.6 years.
-What percentage of their retired employees would receive payments beyond age 76?

• A)53.28%
• B)59.87%
• C)49.13%
• D)46.72%
• E)40.90%

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Definitions:

Cost of Goods Sold

Represents the total cost directly tied to the production or acquisition of the goods sold by a company during a specific period.

Sales

The activities involved in selling goods or services in return for money or other compensation, serving as a primary revenue source for businesses.

Inventory

The raw materials, work-in-progress goods, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor expenses.