The forecasting staff for the PrizerCorporation hasdeveloped amodel topredict sa
ID: 1243880 • Letter: T
Question
The forecasting staff for the PrizerCorporation hasdeveloped amodel topredict sales ofits air-cushioned-ridesnowmobiles. Themodel specifiesthat salesSvary jointly withdisposable personalincomeYand thepopulation betweenages 15 and 40,Z,andinverselywith theprice ofthe snowmobilesP. Based onpast data, thebest estimateof thisrelationship is S=kYZ P wherekhas beenestimated (withpast data)to equal100. a. IfY= $11,000,Z= $1,200,andP= $20,000,what valuewould youpredict forS? b. Whathappens ifPis reducedto $17,500? c. Howwould yougo aboutdeveloping avalue fork? d. Whatare thepotential weaknessesof thismodel?Explanation / Answer
No, the most you can contribute is $17,500, regardless of your income. If you are contributing a certain percent of your salary, you may reach that maximum sooner than somebody does who earns less than you, but that doesn't mean you can't reach it.