Download Question 1

Super Sisters:
Student Coaching Notes
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Concepts Covered

Statistics

Macroeconomics

Financial Accounting

Business Law
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Question 1: Determining
Mrs. Kim’s Real Income



Divide Price Index by 100 to Obtain
Adjusted Price Index
Divide Gross Income by Adjusted Price
Index to Obtain Real Income
Example, For 1987:
Adjusted Price Index = 113.6/100 = 1.136
Real Income = $41,273/1.136 =
$36,331.87
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Question 1:
Descriptive Statistics
Find the Value of and Know the Meaning of:

Mean

Median

Sample Variance

Standard Deviation
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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 113.6 for 1987 Means General Level
of Prices Has Risen 13.6% since 1982-1984
for Bundle of Goods Purchased in 1982-1984.
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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)

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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 to be brought to present day values so
they can be combined.
 If amounts differ over time calculate the present value of a
single sum, 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.
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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 2002 – 2111.
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 2002 – 2111.
4. Determine the present value of the future net cash flow.
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Question 4:
False Imprisonment

Reasonable Cause:



Articulable knowledge of particular facts
sufficiently reasonable to suspect the
detained person of shoplifting
Reasonable Manner
Reasonable Time
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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
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Question 5: Future Income
Compensation

Goal of compensatory damages:


Make the injured party whole again
Lost future incomes are recoverable:


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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.
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