Which of the Following Is Not a Difference Between Defined

question 33

Multiple Choice

Which of the following is not a difference between defined benefit pension plans and other postretirement benefits (OPBs) ?

• A) Unlike defined benefit pension plan payments, there is no cap on the amount of OPBs benefit to be paid to participants.
• B) Unlike defined benefit pension plans, management promises OPBs payments in exchange for current services.
• C) Unlike defined benefit pension plans, employees do not accumulate additional OPBs benefits with each year of service.
• D) Unlike defined benefit pension plans, OPBs do not vest.

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Definitions:

Internal Rate of Return

A financial metric used to evaluate the profitability of an investment, calculated as the discount rate that makes the net present value of all cash flows from the investment equal to zero.

Hurdle Rate

Hurdle Rate is the minimum acceptable return on investment or project that a business requires before it considers it viable or proceeds with it.

Accounting Rate of Return

The return on an investment calculated by dividing the average annual profit by the initial investment cost, typically used to assess the profitability of potential investments.

Net Cash Flow

The difference between a company's cash inflows and outflows during a specific period.