Question

The receipts and year of release of the five 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 2012 (2012 CPI 229.6). Which movie had the largest real box office receipts?

Movies Box Office Recpt Year Released CPI in Year Released

Avatar 760.5 2009 214.5

Titantic 600.8 1997 160.5

Star Wars 461.0 1977 60.6

Shrek 2 437.2 2004 188.90

ET 399.9 1982 96.5

Answer 1

CPI of Avatar for 2012 is calculated by using the formula,

CPI = [(CPI₂₀₁₂ - CPI_{in released year}) / CPI_{in released year} ] * 100

Net Receipts are calculated by using the formula,

Net Receipts₂₀₁₂ = BOR * (CPI₂₀₁₂ / CPI_{in released year})

CPI For Avatar = (229.6 - 214.5) / 214.5 *100

= 7.03 %

Net Receipts = 760.5* (229.6/ 214.5) = 814.03

CPI For Titanic = (229.6 - 160.5) / 160.5 * 100

= 43.05 %

Net Receipts = 600.8 * (229.6/ 160.5) = 859.46

CPI For Star Wars = (229.6 - 60.6) / 60.6 * 100

= 278. 87%

Net Receipts = 461* (229.6/ 60.6) = 1746.62

CPI For Shrek 2 = (229.6 - 188.90) / 188.90 * 100

= 21.54 %

Net Receipts = 437.2* (229.6/ 188.90) = 531.39

CPI For ET = (229.6 - 96.5) / 96.5 * 100

= 137.92 %

Net Receipts = 399.9* (229.6/ 96.5) = 951.47

therefore the highest grossing movie is Star Wars.