: The receipts and year of release of the four movies with the largest nominal b

ID: 1179088 • Letter: #

Question

: The receipts and year of release of the four movies with the largest nominal box office revenues, along with the CPI data of each year are presented below. Assuming that the receipts for each of the movies were derived during their year of release, convert the receipts for each to real dollars for the year 2008 (2008 CPI 215.3). Which movie had the largest real box office receipts?

Movies

Box Office Receipts (millions)

Year Released

CPI in Year Released

Real Box Office Receipts (millions)

Titanic

$600.8

1997

160.5

Star Wars

$461.0

1977

60.6

Shrek 2

$437.0

2004

188.9

E.T.: the Extra Terrestrial

$399.9

1982

96.5

Movies

Box Office Receipts (millions)

Year Released

CPI in Year Released

Real Box Office Receipts (millions)

Titanic

$600.8

1997

160.5

Star Wars

$461.0

1977

60.6

Shrek 2

$437.0

2004

188.9

E.T.: the Extra Terrestrial

$399.9

1982

96.5

The receipts and year of release of the four movies with the largest nominal box office revenues, along with the CPI data of each year are presented below. Assuming that the receipts for each of the movies were derived during their year of release, convert the receipts for each to real dollars for the year 2008 (2008 CPI 215.3). Which movie had the largest real box office receipts?

Explanation / Answer

Calculating the real value of box office receipts of the movies with 2008 as the base year using the formula:

Real Value = Nominal Value * CPI base year / CPI for the period

Using this, the table can be filled as:

Movies

Box Office Receipts (millions)

Year Released

CPI in Year Released

Real Box Office Receipts (millions)

Titanic

$600.8

1997

160.5

$940.69

Star Wars

$461.0

1977

60.6

$1637.84

Shrek 2

$437.0

2004

188.9

$498.07

E.T.: the Extra Terrestrial

$399.9

1982

96.5

$892.43

Thus, Star Wars had the largest real box office receipts.