An employer wishes to provide employee retirement health care benefits. The firm faces a current marginal tax rate of 24% and expects to face a 24% rate in the future. On average, employees face a current tax rate of 31%, which is expected to fall to 28% in retirement. The firm earns 12% pretax in its pension account and 15% pretax from its own operations. The average time until retirement for employees is 25 years. The firm is considering funding the promised retiree health care costs through either a sweetened pension benefit or on a pay-as- you-go approach. Under the pay-as-you-go approach, the benefit to employees will be provided as part of a fringe benefit package that is tax deductible to the employer, and the employees are not taxed on the receipt of the benefit. Pay-As-You-Go Option Q2a: Under the "pay-as-you-go" option, what amount must the employer pay in year 25 to cover $1 of employee medical expenses? [ Select] $1 $1.39 None of the available choices are correct. $0.76 $1.22 [ Select ] Q2b: What is the present value of the employer's cost of providing that amount? [Select] Select] $0.760 $0.369 $0.051 $0.542 None of the available choices are correct. An employer wishes to provide employee retirement health care benefits. The firm faces a current marginal tax rate of 24% and expects to face a 24% rate in the future. On average, employees face a current tax rate of 31%, which is expected to fall to 28% in retirement. The firm earns 12% pretax in its pension account and 15% pretax from its own operations. The average time until retirement for employees is 25 years. The firm is considering funding the promised retiree health care costs through either a sweetened pension benefit or on a pay-as- you-go approach. Under the pay-as-you-go approach, the benefit to employees will be provided as part of a fringe benefit package that is tax deductible to the employer, and the employees are not taxed on the receipt of the benefit. Pay-As-You-Go Option Q2a: Under the "pay-as-you-go" option, what amount must the employer pay in year 25 to cover $1 of employee medical expenses? [ Select] $1 $1.39 None of the available choices are correct. $0.76 $1.22 [ Select ] Q2b: What is the present value of the employer's cost of providing that amount? [Select] Select] $0.760 $0.369 $0.051 $0.542 None of the available choices are correct