Assume that Mrs. Cook’s real income will not change over the next ten years. Use the mean real income from previous steps to determine projected real income for the future ten years of Mrs. Cook’s work expectancy. Use the regression equation from hint 2 to project adjusted price indices for the next ten years. Assume that Mrs. Cook pays 20% of her actual income in taxes and that Green will not provide significant state assistance. Use the projected real income and adjusted price indices to estimate Mrs. Cook’s net actual income for the next ten years (2019-2028). What would be the likely amount of an award to Mrs. Cook based on a present value rate of 8%? Discuss the factors that could cause Mrs. Cook’s future income to differ from your estimate.

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Sample Varianc Sample Deviatic Mean Median Number Year Gross Income Price Index Adjusted Price Index Real Income 227951.0084 1 2004 $60,056.00 188.9 1.889 $31,792.48 477.4421519 2 2005 $61,257.00 195.3 1.953 $31,365.59 $31,104.12 2006 $62,482.00 201.6 2.016 $30,993.06 $30,993.06 4 2007 $63,732.00 207.3 2.073 $30,743.85 2008 $65,007.00 215.3 2.153 $30,193.68 6 2009 $66,307.00 214.5 2.145 $30,912.35 $31,010.09 7 2010 $67,633.00 218.1 2.181 8 2011 S68,986.00 224.9 2.249 $30,674.08 9. 2012 $70,366.00 229.6 2.296 $30,647.21 $30,803.86 $30,928.60 10 2013 $71,773.00 233 2.33 11 2014 $73,208.00 236.7 2.367 12 2015 $74,672.00 237 2.37 $31,507.17 13 2016 $76,165.00 240 2.4 $31,735.42 14 2017 $77,688.00 245.1 2.451 $31,696.45 15 2018 $79,242.00 251.1 2.511 $31,557.95 SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error 0.98987728 0.97985702 0.97830757 0.65867192 Observations 15 ANOVA df SS MS F Significance F Regression Residual 1 274.359967 274.359967 632.386291 2.08E-12 13 5.64003303 0.43384869 Total 14 280 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Year Adjusted Price Index 1958.25615 2.10428052 930.606034 9.62E-33 1953.71013 1962.80217 23.6987101 0.94239611 25.1472919 2.08E-12 21.6627871 25.7346331 Sample Varianc Sample Deviatic Mean Median Number Year Gross Income Price Index Adjusted Price Index Real Income 227951.0084 1 2004 $60,056.00 188.9 1.889 $31,792.48 477.4421519 2 2005 $61,257.00 195.3 1.953 $31,365.59 $31,104.12 2006 $62,482.00 201.6 2.016 $30,993.06 $30,993.06 4 2007 $63,732.00 207.3 2.073 $30,743.85 2008 $65,007.00 215.3 2.153 $30,193.68 6 2009 $66,307.00 214.5 2.145 $30,912.35 $31,010.09 7 2010 $67,633.00 218.1 2.181 8 2011 S68,986.00 224.9 2.249 $30,674.08 9. 2012 $70,366.00 229.6 2.296 $30,647.21 $30,803.86 $30,928.60 10 2013 $71,773.00 233 2.33 11 2014 $73,208.00 236.7 2.367 12 2015 $74,672.00 237 2.37 $31,507.17 13 2016 $76,165.00 240 2.4 $31,735.42 14 2017 $77,688.00 245.1 2.451 $31,696.45 15 2018 $79,242.00 251.1 2.511 $31,557.95 SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error 0.98987728 0.97985702 0.97830757 0.65867192 Observations 15 ANOVA df SS MS F Significance F Regression Residual 1 274.359967 274.359967 632.386291 2.08E-12 13 5.64003303 0.43384869 Total 14 280 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Year Adjusted Price Index 1958.25615 2.10428052 930.606034 9.62E-33 1953.71013 1962.80217 23.6987101 0.94239611 25.1472919 2.08E-12 21.6627871 25.7346331

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Number 1 2 3 year 2004 2005 sample varianc sample deviati mean median 2279510084 4774421519 31 10412 ... View the full answer