Which of the following is not a correct statement with respect to the interest cost component of pension expense?
A. The interest cost component of pension expense in year two is determined by multiplying the projected benefit obligation at the beginning of year two by the discount rate.
B. The interest cost component of a defined benefit pension plan is the portion of expense due to the passage of time.
C. The same interest rate is used to compute service cost, interest cost, and return on plan assets.
D. The interest cost increases the PBO and also increases the pension expense.
Answer: C
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