In the Base Year,a Price Index Has a Value of

question 23

Multiple Choice

In the base year,a price index has a value of

• A) -1.
• B) zero.
• C) 1/100.
• D) 100 × 100.
• E) 100.

---

Definitions:

Straight-Line Depreciation

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

Yearly Depreciation

The accounting process of allocating the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear, and tear over time.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument back to their present value, thus helping to determine the potential value of an investment.

Straight-Line Depreciation

A method of allocating an asset's cost evenly throughout its useful life.