In Year 1 the CPI Is 181,and in Year 2

question 93

Multiple Choice

In year 1 the CPI is 181,and in year 2 the CPI is 195.If Dennis's salary was $95,000 in year 1,what is the minimum salary he must earn in year 2 to "keep up with inflation"?

• A)$112,500
• B)$102,348
• C)$105,750
• D)$88,180

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Definitions:

Accumulated Depletion

The total amount of resource extraction accounted for as an expense over time, reducing the asset's value.

Straight-Line Method

An approach for calculating depreciation of an asset, which spreads the cost evenly over its useful life.

Depreciation

A process for spreading out the expense of a physical asset across its lifespan.

Residual Value

The estimated value that an asset will realize upon its sale at the end of its useful life.