CMA Foundation · Fundamentals of Business Mathematics and Statistics · Index Numbers and Time Series
A firm's nominal sales were ₹9,00,000 in a year when the wholesale price index (base = 100) was 150. Deflating by the index, what are the sales at base-year prices?
Real sales are ₹6,00,000. Deflating means dividing nominal sales by the price index and multiplying by 100, so 9,00,000 times 100 divided by 150 equals 6,00,000 at base-year prices.
- A₹6,00,000Correct
- B₹7,50,000
- C₹13,50,000
- D₹15,00,000
Explanation
Real sales = 9,00,000 × 100/150 = ₹6,00,000. Option ₹13,50,000 multiplies by 1.5, which inflates instead of deflating. Option ₹7,50,000 subtracts 150,000 arbitrarily.
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