The price of a commodity increased by 5% from 2014 to 2015, 8% irom 2015 to 2016 and 77% from 2016 to 2017. The average increase from 2015 to 2017 is quoted as 26% and not 30%. Explain and verify the result.

The price of a commodity increased by 5% from 2014 to 2015, 8% irom 2015 to 2016 and 77% from 2016 to 2017. The average increase from 2015 to 2017 is quoted as 26% and not 30%. Explain and verify the result.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: 10. What was the overall increase in prices due to inflation as a percentage from 2000 to 20162 Year…

A: Increase in prices as a percentage = Increase in prices / Initial price

Q: Use the table to answer the question. Noting that 2010 is the base year, real GDP increased by what…

A: The objective of the question is to calculate the percentage increase in real GDP from 2010 to 2011…

Q: Which of the following factors is/are included in Fama and French’s (2015, “A five-factor asset…

A: The Fama/French 5 factors are made up of six value-weight portfolios based on size and…

Q: Using the income statement below, please compute the correct variance in total revenue (horizontal…

Q: Assume the following. In 2008, the U.S. had real GDP of $16.6 trillion and the CPI was at 90.72. At…

A: Yield to maturity can be calculated by following function in excel =RATE (nper, pmt, pv, [fv],…

Q: Assume that in January 2017, the average house price in a particular area was $294,500. In January…

A: Growth rate The rate of change in value from one period to another is called the growth rate. Growth…

Q: YYYYMM Return(Stk1) Return(Stk2) Return(Market) Return(T-bill) 201701 7.75% 3.00% 6.18% 0.20% 201702…

A: The difference between the expected return by CAPM (capital asset pricing model) and the expected…

Q: Suppose that in 2016, Global launches an aggressive marketing campaign that boosts sales by 18%.…

A: Ratio analysis used identify the business performance of the company.It is used to measure financial…

Q: YYYYMM Return(Stk1) Return(Stk2) Return(Market) Return(T-bill) 201701 7.75% 3.00% 6.18% 0.20% 201702…

A: The Capital Asset Pricing Model (CAPM) is a mathematical model that explains the relationship…

Q: An economy has an ICOR of 4.5. What would be its average annual growth rate if its Domestic Savings…

A: The question is based on the concept of the Incremental Capital Output Ratio (ICOR). ICOR is ratio…

Q: Regarding my question before, if the P/E Ratio is lower, then, the "Market to Book Value" will get…

A: The ratio analysis is made by the company for the purpose of comparing data to its base. It defines…

Q: Annual revenue for a company grew by 5.4% in 2014, 1.2% in 2015, -3.6 % in 2016, -1.2% in 2017, and…

A: Mean growth is the goemetric averge of the five years of growth considering the impact compounding…

Q: Refer to the information provided in Table 7.5 below to ans that follow. Table 7.5 Price per Unit in…

A: Prices tends to increase over the time due to which there is decrease in purchasing power of money…

Q: What is the comparison (analysis) of the Quick Ratio of Industry Average Ratio and the Company A…

A: Quick ratios is one of the liquidity ratios that helps the investors and the managers to analyze the…

Q: The company had the following inventory at end-of-year prices: $1,230,000 in 2016 (base year),…

A: Last in, first out (LIFO) is a method used to account for inventory. Under LIFO, the costs of the…

Q: horizontal analysis by calculating the year-over-year changes in each line item,

A: Horizontal analysis: Horizontal analysis is also called a trend analysis to the analysis of the…

Q: Refer to the table (figures in billions). Year Nominal GDP Price Deflator Real GDP 2012 $3,405.0…

A: Since GDP/price deflator =( Nominal GDP/Real GDP) *100

Q: Data for Barry Computer Co. and its industry averages follow.a. Calculate the indicated ratios for…

A: Introduction:- Ratio analysis is a statistical method that examines financial documents such as the…

Q: Category of industry is real estate. The analysis of Quick Ratio is as follows: 2015: 2.78x 2016:…

A: Quick ratio is a current ratio which is used to assess the short term liquidity of the company.

Q: The Table below summarizes the nominal and real GDP information for an economy for 2013 and 2014:…

A: GDP stands for “Gross Domestic Product”. Nominal GDP can be defined as the market value of goods and…

Q: The aggregate expenditure for a simple economy in 2016 was $9 million. The table below shows…

A: First, we will calculate the aggregate expenditure of the government which includes Consumption,…

Q: from the balance sheets and income statements of Wiper, Inc.: Ratio analysis-comprehensive problem…

A: Accounts receivable: It is a current asset of an organization. It is the amount due from customers…

Q: I need help and i need the excel functions (answers by using excel)

A: Computation:

Q: Sales are 2.42 million in 2023, 2.52 million in 2024, and 2.32 million in 2025. What is the…

A: Comparative analysis of financial data refers to the process of evaluating and comparing financial…

Q: Based on the following data below: In 2019: Total Sales= 1.5 billion with the Motor Category…

A: Sales revenue is total income earned by an organization by selling all its units. It is computed by…

Q: Compute trend percents for the following accounts using 2020 as the base year. For each of the three…

A: Introduction:- Trend analysis of financial statements calculates the percentage changes over time in…

Q: 1. The following are annual rates of returm for PHILIPPINES government T-bills and Singapore common…

A: In the given problem we have 2 sections with 4 subsections in the first section which are being…

Q: The table lists future concentrations of CFC 12 in parts per billion (ppb), if current trends…

A: The future concentrations of CFC 12 (in ppb) are given Also, given that, f(x)=Cax models the given…

Q: 21. Gross domestic product. The U.S. gross domestic prod- Luct, in billions of current dollars, may…

A: The gross domestic profit, in billions of current dollars, may be modeled by the function, P(x) =…

Q: Consumer prices rose 1.0% in May 2022 and 1.3% in June 2022. One of your relatives made the claim…

A: In finance changes in consumer prices is used as barometer of inflation. Here the consumer prices…

Q: Assume that the base year is 2015. Good 2015 Price 2015 Quantity 2016 Price 2016 Quantity $2 250 $3…

A: Formula used for calculating CPI:-

Q: Round up to two decimal places b. If an item was $3,000 in 2010, how much was it worth in 2015? I…

A: Consumer Price Index can be used for two period to know the real value of an item in the past in…

Q: Income Statement (2017) Balance Sheet (2017) Credit Sales 1,500 Cash ? Accounts-Payable Cost of…

A: Cash conversion cycle can be calculated by adding days inventory outstanding and days sales…

Q: The following is a scatterplot for a company's actual annual sales (in millions of dollars) for 11…

A: Annual sales refer to the total amount of revenue generated by a company from the sale of its goods…

Q: The analysis of Times Interest Earned (TIE) is as follows: 2015: 5.53 2016: 3.80 2017: 5.78 2018:…

A: Interest refers to the monetary value which is paid, or collected on the amount of the investment,…

Q: Fill in the blanks with the number that corresponds to the correct word or phrse below: 2. GDP…

A: The student has asked multiple fill in the blanks.In the next step, I have answered all the fill in…

Q: 3.3.5. Table 5: Historical Demand Year 2015 2016 2017 2018 2019 Target number of populations 112,491…

A: Demand and supply are major forces in every economy. The demand for the product determines the level…

Q: Determine PN ratio, fixed cost and BEP with the help of following information: Description Sales (…

A: The break even point is the point at which total cost and total revenue are equal, meaning there is…

Q: Suppose that in 2010, Country A's GDP was equal to $250$⁢250 billion and federal tax revenue was…

A: Answer Step 1 Let us note down the information relating to year 2010 GDP $250 billion…

Q: Category of industry is real estate. The analysis of Market to Book Ratio is as follows: 2015:…

A: Market to Book Ratio is a financial ratio which is used to assess the company’s current market value…

Q: Classify this news event as systematic or unsystematic and indicate if prices will increase or…

A: In finance there are two main types of risks related to investments in stocks. They are systematic…

Q: GDP Growth in % Bivariate Fit of GDP Growth in % By Year 4.5 4- 3.5 3- 2.5 2 1.5- 1- 0.5 0 O r =…

A: Scatter plot is the graphical representation of correlation between two variables. When the…

Concept explainers

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.

Question

The price of a commodity increased by 5% from 2014 to 2015, 8%
from 2015 to 2016 and 77% from 2016 to 2017. The average increase from 2015 to
2017 is quoted as 26% and not 30%. Explain and verify the result.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The analysis of Inventory Turnover Ratio is as follows: 2015: 4.34 2016: 3.15 2017: 4.76 2018: 2.94 2019: 5.32 a. What is the trend analysis for that Inventory Turnover Ratio and why it is increasing/decreasing?
The Korean manufacturing output per hour index is given for years 2014–2018 as follows: a. For each year from 2015 to 2018 determine the rate of increase in Korean manufacturing output per hour to two decimal places. b. Because this index, like inflation, is compounded from period to period (e.g., year to year), estimate the overall annual rate of increase in Korean manufacturing output per hour from 2015 to 2018. Suggestion! Do not simply average the rates of part (a).
Selected comparative financial statements of Haroun Company follow. HAROUN COMPANY Comparative Income Statements For Years Ended December 31, 2021-2015 ($ thousands) Sales 2021 Cost of goods sold $ 1,769 1,271 2020 $ 1,549 2019 2018 2017 2016 2015 $ 1,410 $ 1,292 $ 1,206 $ 1,121 $ 919 1,034 889 778 723 676 539 Gross profit 498 515 521 514 483 445 380 Operating expenses Net income 377 295 271 200 173 171 142 $ 121 $ 220 $ 250 $ 314 $ 310 $ 274 $ 238 HAROUN COMPANY Comparative Year-End Balance Sheets December 31, 2021-2015 ($ thousands) Assets Cash Accounts receivable, net Merchandise inventory Other current assets Long-term investments Plant assets, net Total assets Liabilities and Equity 2021 2020 2019 2018 2017 2016 2015 $ 108 773 $ 142 812 $ 148 735 2,797 2,036 1,779 $ 151 564 1,499 $ 157 496 $ 155 $ 160 470 332 1,346 1,144 829 72 65 40 71 60 61 32 e B 220 220 220 220 3,422 3,409 2,982 1,683 $ 7,172 $ 6,464 $ 5,684 $ 4,188 $ 4,019 1,740 1,546 $ 3,596 $ 2,900 1,327 Current liabilities…
The day point gain of the Dow Jones Industrial Average that occurred on November 13, 2016, was a gain of 319 points and closing at 7,165. What was the percent gain?
Net Income for Company A is $200,000 in 2014, $300,000 in 2015, $400,000 in 2016, $500,000 in 2017, and $600,000 in 2018. The expected growth for all years after 2018 is 5%, the 90-Day T-Bill Rate is 20%, and the appropriate percentage above risk-free rate is 12%. Using this information, what is the appropriate discount rate? A. O.32 B. 0.02
In October 2017 a pound of apples cost $1.61, while oranges cost $1.25. Two years earlier the price of apples was only $1.40 a pound and that of oranges was $1.11 a pound. a. What was the annual compound rate of growth in the price of apples? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What was the annual compound rate of growth in the price of oranges? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. If the same rates of growth persist in the future, what will be the price of apples in 2030? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. If the same rates of growth persist in the future, what will be the price of oranges in 2030? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
YYYYMM Return(Stk1) Return(Stk2) Return(Market) Return(T-bill) 201701 7.75% 3.00% 6.18% 0.20% 201702 1.27% 2.12% 1.63% 0.20% 201703 7.63% 1.50% 1.56% 0.15% 201704 9.25% -1.01% 2.09% 0.30% 201705 10.20% 2.66% 4.25% 0.30% 201706 4.33% 2.59% 0.41% 0.30% 201707 12.25% 10.41% 6.05% 0.35% 201708 4.98% -2.94% 2.37% 0.45% 201709 2.19% -1.69% -1.49% 0.20% 201710 4.05% 3.43% 2.51% 0.20% 201711 13.78% 8.29% 3.30% 0.15% 201712 2.01% 1.96% 2.54% 0.30% 201801 14.19% 23.60% 9.92% 0.30% 201802 -6.77% -4.18% -6.21% 0.55% 201803 -5.23% -10.14% -2.44% 0.60% 201804 -4.54% 1.93% 2.38% 0.20% 201805 2.32% -1.32% -1.10% 0.20% 201806 -1.35% -7.01% -4.97% 0.15% 201807 -9.80% -1.86% -1.29% 0.30% 201808 -4.28% -1.95% -2.43% 0.30% 201809 -4.94% 0.27% -0.36% 0.75% 201810 -17.39% -7.14% -10.11% 0.30% 201811 16.85% 9.62% 6.11% 0.55% 201812 0.64% -0.61% -2.49% 0.60% 201901 10.19% 7.68% 8.11% 0.20% 201902 -2.95% 10.90% 2.47% 0.20% 201903 7.50% 2.26% 1.46% 0.20%…
Trend Analysis: Sales: 2012 = $180,000; 2013 = $250,000; 2014 = $400,000; 2015 = $150,000. Prepare a trend analysis for year 2012.
You are given the dollar value of a product in 2016 and the rate at which the value of the product is expected to change during the next 5 years. Use this information to write a linear equation that gives the dollar value V of the product in terms of the year t. (Let t = 16 represent 2016.) 2016 Value Rate $5000 $170 decrease per year
Compute trend percents for the following accounts using 2020 as the base year. For each of the three accounts, state whether the situation as revealed by the trend percents appears to be favourable or unfavourable. 2024 2023 Sales Cost of goods sold Accounts receivable $ 553,119 290,122 26,882 $ 363,894 190,775 21,215 2022 $ 292,284 155,088 20,021 2021 $ 210,276 110,844 12,322 2020 $ 159,300 82,836 10,928 2024: 2023: 2022: 2021: 2020: Numerator: Trend Percent for Net Sales: 1 Is the trend percent for Net Sales favourable or unfavourable? 2024: 2023: 2022: 2021: 2020: Denominator: = Trend percent 0 % 0% 0% 0% 0 % Trend Percent for Cost of Goods Sold: Numerator: Denominator: Is the trend percent for Cost of Goods Sold favourable or unfavourable? = Trend percent 0% 0% 0% 0% 0%
The price of gold (end-of-year closing price in dollars per troy ounce) is shown in the table below. The CPI index for the given years is shown to the right. Complete parts (a) through (c) below. Average Annual Consumer Price Index (CPI) Year 1986 1996 2006 2016 Price $427 Year 1986 1996 2006 | 2016 CPI 109.6 156.9 201.6 240.0 $321 $642 $827 a. The prices shown in the table above are not adjusted for inflation. Revise the above table to express all prices in terms of 2016 dollars. Year 1986 1996 2006 2016 2016 Price (Round to the nearest cent as needed.)
I will always like all sections - Thanks for your help, I appreciate it.