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John Johnson has an expected income of 850,000 before tax next year. Assume for simplicity that the full amount is paid one year from today.
John Johnson has an expected income of 850,000 before tax next year. Assume for simplicity that the full amount is paid one year from today. Statistics estimate wage growth going forward to be 3% annually. His required rate of return is 5% annually. He is in good health and has no plans to retire before he is 70, ie in 40 years from today. His tax rate is 42% and it is assumed that he has a necessity consumption of 60% of income after tax.
What is John's human capital?
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