Scenario: in 2000, World GDP Per Capita Was $5,500

question 195

Multiple Choice

Scenario: In 2000, world GDP per capita was $5,500. In 2010, world GDP per capita was $9,500.
-Refer to the scenario above.What formula would you use to calculate the world average annual growth rate g?

• A) g = (9,500 - 5,500)/10
• B) g¹⁰ = (9,500 - 5,500)
• C) 5,500 × (1 + g)¹⁰ = 9,500
• D) 9,500 × (1 + g)¹⁰ = 5,500

---

Definitions:

Declining Balance

Declining balance is a method of accelerated depreciation in which an asset's book value is reduced at a faster rate in the early years of its life.

Straight-Line

A method of calculating depreciation of an asset where the asset's cost is evenly spread over its useful life.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Securities and Exchange Act

A U.S. law enacted in 1934 to regulate the securities industry and mandate disclosure of important financial information for publicly traded companies.