Assume the Actuary Estimates the Net Cost of Providing Health

question 32

Multiple Choice

Assume the actuary estimates the net cost of providing health care benefits to a particular employee during his retirement years to have a present value of $60,000. If the benefits relate to an estimated 25 years of service and five of those years have been completed:

• A) The EPBO would be $12,000.
• B) The EPBO would be $8,400.
• C) The APBO would be $8,400.
• D) The APBO would be $12,000.