ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
How many years will it take for the dollar's
what it is now, if the general inflation rate is expected to continue at the rate of 7% for an indefinite period?
(a) About 10 years
(b) About 12 years
(c) About 13 years
(d) About 16 years
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- Inflation has been a reality for the general economy of the U.S. in many years. Given this assumption, calculate the number of years it will take for the purchasing power of today’s dollars to equal onethird of their present value. Assume that inflation will average 2.5% per year.arrow_forwardFind the present worth of earthmoving equipment that has a first cost today of $145,000, an annual operating cost of $60,000, and a salvage value of 20% of the first cost after 5 years, these estimates being in future dollars. Assume that the real interest rate is 12% per year and that inflation has averaged 7% per year. Solve with inflation (a) not accounted for and (b) accounted for. a) The present worth with inflation not accounted for is $ b) The present worth with inflation accounted for is $arrow_forwardFind the present worth of earthmoving equipment that has a first cost today of $139,000, an annual operating cost of $54,000, and a salvage value of 20% of the first cost after 5 years, these estimates being in future dollars. Assume that the real interest rate is 10% per year and that inflation has averaged 5% per year. Solve with inflation (a) not accounted for and (b) accounted for. a) The present worth with inflation not accounted for is $ b) The present worth with inflation accounted for is $arrow_forward
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