The estimated medical costs are expected to be $7,500 during an employee's retirement. the retiree is expected to pay 30% of the cost and medicare is expected to pay 50% of the cost. what is the company's estimated net cost of benefits?
a.$3,750.
b.$5,250.
c.$7,500.
d.$1,500.

option D

Explanation:

given,

estimate medical cost are expected = $7,500

The retiree is expected to pay 30% of the cost.

Medicare is expected to pay 50% of the cost.

company estimated net cost benefits = ?

retiree expected pay = 30 % of $7,500

                                   = 0.3 x $7,500

                                   = $2,250

Medicare expected pay = 50% of $7,500

                                        = 0.5 x $7,500

                                        = $3,750

company's net cost benefits = $7,500 - ($2,250+$3,750)

                                               = $7,500 - $6000

                                               = $1,500

hence, the correct answer is option D

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