Baron Art Mart, Inc. Student Coaching Notes. Concepts Covered. Statistics Macroeconomics Financial Accounting Business Law. Question 1: Determining Mrs. Kim’s Real Income. Divide Price Index by 100 to Obtain Adjusted Price Index
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Adjusted Price Index = 136.2/100 = 1.362 Real Income = $50,599/1.362 = $37,150.51
Find the Value of and Know the Meaning of:
Show the Value of and Know the Meaning of:
Price Index = Intercept + (Coefficient) x (Year)
Do your calculations for question 3 in the following order:
1. Use mean real income from question 1 to determine projected real income for 2006 – 2015.
2. Use regression equation from question 2 to determine projected adjusted price indices.
3. Use projected real income, adjusted price indices, and tax to estimate Mrs. Kim’s net actual income for 2006 – 2015.
4. Determine the present value of the future net cash flow.