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.
