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# Baron Art Mart, Inc. Student Coaching Notes - PowerPoint PPT Presentation

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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### Baron Art Mart, Inc.Student Coaching Notes

• Statistics

• Macroeconomics

• Financial Accounting

• Divide Price Index by 100 to Obtain Adjusted Price Index

• Divide Gross Income by Adjusted Price Index to Obtain Real Income

• Example, For 1991:

Adjusted Price Index = 136.2/100 = 1.362 Real Income = \$50,599/1.362 = \$37,150.51

Question 1:Descriptive Statistics

Find the Value of and Know the Meaning of:

• Mean

• Median

• Sample Variance

• Standard Deviation

Question 2:What is a Price Index?

• Shows Relationship between Price Level in Given Year and Price Level in Base Year.

• The Base Year in Case is 1982-1984. Price Index for Base Year is Always 100.

• Index of 136.2 for 1991 Means General Level of Prices Has Risen 36.2% since 1982-1984 for Bundle of Goods Purchased in 1982-1984.

Question 2:Regression Results

Show the Value of and Know the Meaning of:

• Coefficient of Determination (R Square)

• p-Value for Year

• Regression Coefficient for Year

• Regression Equation:

Price Index = Intercept + (Coefficient) x (Year)

Question 3:Present Value

• Present value is a technique that considers the time value of money.

• PV allows cash amounts expected to be paid or received at different times in the future to be brought to present day values. Then the amounts can be combined.

• If amounts differ over time, calculate the present value of each and add. If amounts are equal each period, calculate the present value of an annuity.

• It is easiest to use the net present value function on your spreadsheet.

Question 3:Projection of income

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.

Question 4:False Imprisonment

• Reasonable Cause:

• Articulable knowledge of particular facts sufficiently reasonable to suspect the detained person of shoplifting

• Reasonable Manner

• Reasonable Time

Question 4:Reasonable Manner

No

• Use of threats

• Coercion of customer

• Intimidation of customer

• Use of abusive language towards the customer

• Use of force against the customer

• Failure to promptly inform the customer of the reasons for the detention

• Detention takes place in public next others

• Goal of compensatory damages:

• Make the injured party whole again

• Lost future incomes are recoverable:

• Nature and occurrence of lost future income must be shown by evidence of reasonable reliability, not mere speculation.

• Evidence of reasonable reliability may include reliance on specific statistical models based on past earning records.

• Proper measurement of damages is the present value of net future income after taxes.