Chan has been in the chemical industry for the past 22 years.Current employment total is 65 workers, and the current economic situation (inflation of 4 percent, nominal discount rate) has forced the company to close its doors.Chan however, must continue to pay health care costs for the next four years at a cost of $2,400 per worker, at an increasing rate of 3 percent above inflation.A consultant is called in to find the present value of this obligation.

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The Answer of Chan has been in the chemical industry for the past 22 years.Current employment total is 65 workers, and the current economic situation (inflation of 4 percent, nominal discount rate) has forced the company to close its doors.Chan however, must continue to pay health care costs for the next four years at a cost of $2,400 per worker, at an increasing rate of 3 percent above inflation.A consultant is called in to find the present value of this obligation.

Chan Has Been in the Chemical Industry for the Past