A Company Has Data on Annual Revenue for Ten Years

question 88

Short Answer

A company has data on annual revenue for ten years beginning in 1995. The company wants to compute an index using the revenues from 1995, 1996, and 1997 as the based. If the revenues for the three years were (in $millions): $1.5, $1.3, and $2.0, what is the base value?

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Definitions:

Accrued Interest

Interest that has accumulated but remains unpaid.

360-Day Year

A financial convention that simplifies interest calculation by assuming a year has 360 days.

Commission

A fee paid for services, usually a percentage of the total cost.

Current Yield

The annual interest income of a bond, calculated by dividing the annual interest by the current purchase price.