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Over a 5-year period, a company reported annual profits of $8 million, $3 million, $2 million, and $9 million. In the fifth year, it reported a loss of $7 million. What was the mean annual profit?

Sagot :

Given

Annual profits of four years $8 million, $3 million, $2 million, and $9 million.

In the fifth year, it reported a loss of $7 million.

To find:

The mean annual profit.

Solution:

Formula for mean is:

[tex]\text{Mean}=\dfrac{\text{Sum of observations}}{\text{Number of observations}}[/tex]

Annual profits are $8 million, $3 million, $2 million, $9 million and -$7 million. Here negative sign represent loss.

So, the mean annual profit is:

[tex]\text{Mean}=\dfrac{8+3+2+9+(-7)}{5}[/tex]

[tex]\text{Mean}=\dfrac{22-7}{5}[/tex]

[tex]\text{Mean}=\dfrac{15}{5}[/tex]

[tex]\text{Mean}=3[/tex]

Therefore, the  mean annual profit is $3 million.

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