Calculate the annual arithmetic and geometric average return on the investment using the following variables Year, Performance, Index (Index is 100 for years 1 - 6) Year 1:  11.1%  Year 2:   8.4% Year 3:   7.6% Year 4:   -2.0% Year 5:   12.6% Year 6:   -2.1%

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 8P
Question

Calculate the annual arithmetic and geometric average return on the investment using the following variables

Year, Performance, Index (Index is 100 for years 1 - 6)

Year 1:  11.1% 

Year 2:   8.4%

Year 3:   7.6%

Year 4:   -2.0%

Year 5:   12.6%

Year 6:   -2.1%

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