1.Use Excel, along with the provided file, to determine Mrs. Cooks real income for the last fifteen years. In addition, find the mean, median, standard deviation, and variance of her past real income. Explain the meaning of these statistics. Can you use the mean income to forecast future earnings? Take into account both statistical and non-statistical considerations. 2. Interpret the price indices in Exhibit 3? How do economists construct them? Use Excel regression to analyze the relationship between the adjusted price index and year. Interpret your regression findings by discussing the coefficient of determination (R- squared), the regression coefficient, the regression equation, and the p-value/T Stat. Can you use the regression equation to predict the price indices? Take into account statistical, macroeconomic, and other considerations.

3.Assume that Mrs. Cooks 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. Cooks 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. Cooks net actual income for the next ten years. 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. Cooks future income to differ from your estimate.

Number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Gross Income Price Index Adjusted Price Index Real Income 60,056 188.9 61,257 195.3 62,482 201.6 63,732 207.3 65,007 215.3 66,307 214.5 67,633 218.1 68,986 224.9 70,366 229.6 71,773 233.0 73,208 236.7 74,672 237.0 76,165 240.0 77,688 245.1 79,242 251.1 Number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Gross Income Price Index Adjusted Price Index Real Income 60,056 188.9 61,257 195.3 62,482 201.6 63,732 207.3 65,007 215.3 66,307 214.5 67,633 218.1 68,986 224.9 70,366 229.6 71,773 233.0 73,208 236.7 74,672 237.0 76,165 240.0 77,688 245.1 79,242 25