Solve the Problem. -The Geometric Mean Is Often Used in Business and Economics

question 211

Multiple Choice

Solve the problem.
-The geometric mean is often used in business and economics for finding average rates of change, average rates of growth, or average ratios. Given n values (all positive) , the geometric mean is the nth root of their product.
The average growth factor for money compounded at annual interest rates of 34%, 26%, 24%, and 22% can be
Found by computing the geometric mean of 1.34, 1.26, 1.24, and 1.22. Find that average growth factor.

• A) 0.0187
• B) 1.5982
• C) 1.2642
• D) 0.6386

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Definitions:

Remodeling

The process of making improvements or alterations to a building's structure or design, often to update or increase its value.

Excavation Costs

Expenses associated with the removal of earth to make way for construction or mining operations.

Wasting Assets

Wasting assets are assets that have a limited lifespan and thus decrease in value over time, such as natural resources.

Leasehold Improvements

Leasehold improvements refer to alterations made to rental premises in order to customize it for the needs of a tenant.