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7. Employees of the Horizon Distributing Company will receive annual pension payments from the company when they retire. The employees will receive their annual
7. Employees of the Horizon Distributing Company will receive annual pension payments from the company when they retire. The employees will receive their annual payments for as long as they live. Assume on average each employee will receive 15 annual payments beyond retirement. Tinker will receive $24,000 annual pension payments starting from Dec 31 of 2027. Compute the present value of the pension obligation to Tinker as of December 31, 2024. Assume a 12% interest rate.
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