A.)

B.)

A.) Assume that Mrs. Ivory's real income will not change over the next sixteen years. Use the mean real income to determine projected real income for the future sixteen years of Mrs. Ivory's work expectancy.

B.) Use the regression equation to project adjusted price indices for the next sixteen years. Assume that Mrs. Ivory 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. Ivory's net actual income for the next sixteen years. What would be the likely amount of an award to Mrs. Ivory based on a present value rate of 8%? Discuss the factors that could cause Mrs. Ivory's future income to differ from your estimate.