IIFT 2017 Question Paper Question 112

Instructions

Refer to the Table below. It provides quarterly output data of a company for four years (1998-2001) and its trend calculated through 4-quarter Moving Average Method:


Question 112

In which year the quarterly compound average growth rate (CAGR) is the second lowest?

Solution

Compound Average Growth Rate= $$[\frac{End value}{Startvalue}]^{1/n}-1$$

1998 growth rate = $$[\frac{61}{65}]^{1/4}-1$$= -1.57%

1999 growth rate = $$[\frac{67}{68}]^{1/4}-1$$  = -0.36%

2000 growth rate = $$[\frac{52}{70}]^{1/4}-1$$  = -7.4%

2001  growth rate = $$[\frac{58}{60}]^{1/4}-1$$  = -0.84%

1998 is the year with second lowest quarterly CAGR.


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