Hello fellow-candidates,
In the solution to the first part of the problem for adjusting cash flows, I am having trouble understanding why we need to look at the excess of Company’s Contribution vs. Total Pension Costs on an after-tax basis. I thought that contributions to DB plans are not taxed, why is it that we look at the excess contribution on an after-tax basis?
I’d appreciate any help with this… thank you!
~Tiny