Homework (Ch 16) Due Tomorrow at 2 PM EST 3. Comparing salaries from different t

Question

Homework (Ch 16) Due Tomorrow at 2 PM EST 3. Comparing salaries from different times Consider golfers who led the Professional Golfers of America (PGA) in winnings at different points in time. Note that the winnings are nominal figures (unadjusted for inflation). To convert the original earnings of Palmer, Watson, and Kite, use the formula for converting dollar figures from an earflier era into year 2010 U.S dollars. Using those figures, fill in the following table, making sure to round your responses to the nearest U.S. dollar Nominal Winnings U.S. CPI (Dollars) 128,230 530,808 375,699 20,508,163 (1983 100) Winnings in 2010 Dollars 1963 Arnold Palmer 1980 Tom Watson 1981 Tom Kite 2010 Tiger Woods 30.6 82.4 90.9 224.9 20,508,163 nings in nominal dollars is the same as the golfer with the highest rue or False: According to the previous table, the golfer with the highest PGA win GA winnings after adjusting for inflation. True False

Explanation / Answer

We use the formula

Winning in 2010 dollars = Winning in a given year x CPI in 2010 / CPI in given year

This gives us the indication that in both cases Tiger woods earned the highest

Hence the statement is TRUE

Year Golfer Earnings US CPI Winning in 2010 dollars 1963 A 128230 30.6 942449 1980 TW 530808 82.4 1448771 1981 TK 375699 90.9 929535 2010 TWO 20508163 224.9 20508163

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