Indigo, Inc. is a furniture manufacturing company with50employees. Recently, after a long negotiation with the local labor union, the company decided to initiate a pension plan as a part of its compensation plan. The plan will start on January 1, 2017. Each employee covered by the plan is entitled to a pension payment each year after retirement. As required by accounting standards, the controller of the company needs to report the pension obligation (liability). On the basis of a discussion with the supervisor of the Personnel Department and an actuary from an insurance company, the controller develops the following information related to the pension plan.

Average length of time to retirement15 yearsExpected life duration after retirement11 yearsTotal pension payment expected each year after retirementfor all employees. Payment made at the end of the year.$823,000 per year

The interest rate to be used is12%.

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On the basis of the information above, determine the present value of the pension obligation (liability).(Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

The present value of pension obligation (liability)