- Business
- Finance
- Capital Budgeting
- Capital Budgeting Ratios
- Profitability Index (PI)
- 309516

# Calculating simple and aggregate price index

Below is information on food items for the years 2000 and 2004. Use this table for problems 27 & 28. Show All Work

2000 2004

Item Price Quantity Price Quantity

Margarine (pound) $0.81 18 $0.89 27

Shortening (pound) $0.84 5 $0.94 9

Milk (1/2 gallon) $1.44 70 $1.43 65

Potato chips $2.91 27 $3.07 33

27. Compute a simple price index for each of the four items. Use 2000 as the base period.

28. Compute a simple aggregate price index. Use 2000 as the base period.

Solution describes the steps to calculate simple and aggregate price index in the given case.