Gulten Started Her Career with an Annual Salary of $82,000

question 112

Multiple Choice

Gulten started her career with an annual salary of $82,000 in 2006. Five years later, in 2011, her salary had increased to $85,000 a year. If the values of the CPI (with a base of 1982−1984) for 2006 and 2011 are 201.6 and 224.9, respectively, compute the increase in Gulten's real income.

• A) −7.08%
• B) 3.66%
• C) 15.68%
• D) 92.92%

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Definitions:

Avoidable Costs

Expenses that can be eliminated if a particular decision is made or if a particular activity is discontinued.

Irrelevant Costs

Costs that should not influence decision-making because they will not change regardless of the outcome.

Sunk Costs

Past expenditures that have already been incurred and cannot be recovered or altered by current or future actions.

Decision Making

Selecting a course of action from competing alternatives.