If an offer of $120,000 remotely in City A (Index 130) is compared to the company's base in City B (Index 160), what is the effective reduction in purchasing power?
Answer
$24,000
The text calculates this reduction by determining the equivalent value based on the index difference. An offer of $120,000 in City A (Index 130) relative to City B (Index 160) results in an effective reduction of $24,000 in purchasing power relative to the baseline cost structure of the company's location.
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