If the annual cost of a given good rises 2.3% per year for the next 20 years, write an equation to model the approximate cost of the good during any year in the next 20. Determine how long it will take for the price of the good to double.

If the annual cost of a given good rises 2.3% per year for the next 20 years, write an equation to model the approximate cost of the good during any year in the next 20. Determine how long it will take for the price of the good to double.

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter2: Descriptive Statistics

Section: Chapter Questions

Problem 16P: If an asset declines in value from 5,000 to 3,500 over nine years, what is the mean annual growth...

See similar textbooks

Related questions

Q: The cost of grocery will increase $12% per year starting 3 years from now and will continue until…

A: Present value of cost of grocery in year n = C x (1 + i)-n Where, C = cost of grocery in year n i =…

Q: Your firm has taken on cost saving measures that will provide a benefit of $11,000 in the first…

A: First year benefits (C) = $11,000 Annual growth rate (g) = - 0.03 (-3%) Interest rate (r) = 0.09…

Q: A precision lathe costs $11,300 and will cost $26,500 a year to operate and maintain. If the…

A: Here, Lathe Costs is $11,300 Operation and Maintenance Cost is $26,500 Time Period is 4 years…

Q: Suppose the costs of an environmental pollution-control program are expected to be equal to $80 per…

A: Calculate net benefits at 4% discount rate as below: Net Benefit=NPV50years + NPV51 years…

Q: Suppose that the firm Cherry Blossom has an orchard they are willing to sell today. The net annual…

A: This question is based on the concept of fair value asset pricing which says that the fair market…

Q: Suppose an initial investment of $100 will return $50/year for three years (assume the $50 is…

A: Given information:Initial investment = $100Discount rate = 20%Return:Year 0 =0Year 1 =$50Year 2…

Q: A Pump manufacturer expects its materials cost to be $1,000,000 this quarter and to increase by…

A: Present Worth(PW) is the accumulation of discounted values for all amounts in a series. It is…

Q: If an investment project costs a firm £200 and yields a stream of profits of £100 per year for the…

A: Internal rate of return(IRR) is one of the techniques of capital budgeting that take into…

Q: Determine the NPV for the following: An information system will cost $95,000 to implement over…

A: According to the information provided: Cost in Year 0 = $95000 Savings in Year 1 = $30000 Saving in…

Q: An investment company wants to study the usage of new technology for one of its clients. This…

A: Human Hour Per month = 187 Average Savings per Human hour = $450 Average savings per month =…

Q: You are considering purchasing a dump truck. The truck will cost $45,000 and have operating and…

A: Computation:

Q: The following problem is designed to be solved by spreadsheet. Maintenance costs for a new facility…

A: Present value is the current worth of an amount of money in future. The future amount is…

Q: The manufacture of equipment costs $73,000 per year. An engineer finds that by spending $16,000 now…

A: Costs per year= 73000 Initial Cost = 16000 Updated costs per year: Year Cash Outflow 1 -58000…

Q: An annual maintenance cost of a machine is 500 this year. It is expected to increase 50 pesos per…

A: The time value of money is the idea that the value of money received today will be more worthy than…

Q: Assume that the average price of a new home is $158,500. If the cost of a new home is increasing at…

A: Financial Accounting: It involves identifying. recording, summarizing and reporting the economic…

Q: If a person saves $62 a month by using coupons and doing comparison shopping, (a) what is the amount…

A: Future Value of Ordinary Annuity refers to the concept which determines the sum total of all the…

Q: Metalfab Pump and Fiter Inc. estimates that the cost of steel bodies for pressure valves will…

A: First quarter cost = $ 80 Increase in cost per quarter = $ 2 Number of quarters in 3 Years = 3*4 =…

Q: You bought an asset for $10,000 and sold it for $20,000 after 10 years. What was the annual rate of…

A: Using excel RATE function

Q: Crow Corporation, a company that specializes in precision metal fabrication, is conducting a study…

A: Given information: Interest rate is 12% Number of years is 2 Cost is $260,000

Q: What annual rate of return is earned on a $1,000 investment when it grows to $2,700 in eight years?

A: Future value is the value of assets at a future date given a growth rate. This is used for financial…

Q: Data for two 50-h motors are follows: Power cost is 2.00 per kWh. If money is worth 20%, how many…

A: Answer - Step 1- Calculation of Annual Cost of Alpha Motor - Let N be the number of hours per…

Q: You plan to purchase an office space in Chamblee's Chinatown for $50,000 at the end of year 2021.…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Suppose that annual income from a rental property is expected to start at $1,330 per year and…

A: P0=$1,330×(P/A, 7%, 16)-$40×(P/G, 7%, 16)

Q: You are upgrading to better production equipment for your firm's only product. The new equipment…

A: Incremental revenue is the amount of revenue earned from the units sold over and above the current…

Q: A machine having a first cost of $20,000 is expected to save $1500 in the first year of operation,…

A: Information Provided Machine first cost = $20,000 Savings in the first year = $1500 Increment in…

Q: Corning Ceramics expects to spend $400,000 to upgrade equipment two years from now. If the company…

A: Amount to be spent 2 years from now=$400,000 Minimum attractive rate of return=20% p.a. Formula to…

Q: Equipment maintenance costs for manufacturing explosion-proof pressure switches are projected to be…

A: Equivalent annual worth is the technique which is used for investment proposal assessment. It can be…

Q: New manufacturing equipment costs $225,000, salvage value is $25,000, and average annual earnings of…

A: a) Average annual rate of return = Average Annual Earning per year / Investment value

Q: What should the resale value of a machine if it is bought at $100,000 that will produce a net…

A: The annual return seems to be the rate of return on investment over time, given as a time-weighted…

Q: Zwango Plus Manufacturing expects that fixed costs of keeping its Zephyr Hills Plant operating will…

A: = Initial Amount + AC

Q: You decide instead to model future maintenance costs by assuming that year 1 will be $4000 and they…

A: The equivalent present value is equal to the sum of the present value of cash flows for each year.

Q: A robot’s first cost is $40,000, and its market value declines by 20% annually. The operating and…

A: Equivalent Uniform Annual Cost (EUAC) refers to the annual cash flows generated in the form of…

Q: An equipment is estimated to cost $300,000 four years from now and an additional $100,000 five years…

A: Introduction: Present value refers to the current valuation for a future sum. Investors determine…

Q: Machine X will produce cost savings of $6,000 per year for four years; machine Y will produce cost…

A: Calculate the present value for both machines as follows:

Q: Metalfab Pump and Filter, Inc. estimates that the cost of steel bodies for pressure valves will…

Q: Suppose you were considering purchasing a $5000 machine today that would generate additional net…

A: Given information, Cost of machine = $5,000 Expected rate of return = 15% Additional net profit per…

Q: An investment will pay $25 per year (indefinitely), starting in one year’s time. The annual payments…

A: Given, Annual payment = $25 per year The growth rate of Annual payments = 3% Price of the investment…

Q: Machine A costs $500,000 to purchase, result in electricity bills of $100,000 per year, and last for…

A: Computation: Machine A:

Q: If you buy a factory for $250,000 and the terms are 20 percent down, the balance to paid off over 30…

A: Purchase consideration for the facor, S = $ 250,000Down payment = 20%Yoour own contribution = Down…

Q: eveloper plans to start construction of a building in one year if at that point rent levels make…

A: The net gain or loss of an investment over a specific time stated as a percentage of the…

Q: A conveyor system costs $110,000 to install. The salvage value of the conveyor system decreases by…

A: The EUAC and ORI is Computed by finding out the Present value and the EUAC for each of the year. The…

Q: What would be the rate of return (IRR) on a project that had an initial cost of $100,000 today and…

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Question

If the annual cost of a given good rises 2.3% per year for the next 20 years, write an
equation to model the approximate cost of the good during any year in the next 20.
Determine how long it will take for the price of the good to double.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment of $412,000, and the store expects a return of $100,000 in year one, $72000 in years two and three, $65,000 in years four and five, and $38,000 in year six and beyond, what is the payback period?
Towson Industries is considering an investment of $256,950 that is expected to generate returns of $90,000 per year for each of the next four years. What Is the Investments internal rate of return?
Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $420,000 and will generate $95,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further Instructions on internal rate of return in Excel, see Appendix C.
How much must be invested now to receive $30,000 for 10 years if the first $30.000 is received one year from now and the rate is 8%?
If an asset declines in value from 5,000 to 3,500 over nine years, what is the mean annual growth rate in the assets value over these nine years?
Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.
The demand for a product during the next ten years will be such that revenues will be $100,000 the first year and will increase by $10,000 each year thereafter. If inflation is assumed to be 6% per yuear and the company uses 10% in its economic studies, what is the present worth of the revenues expressed in present dollars?
A company expects the cost of equipment maintenance to be $5,000 in year one, $5,500 in year two, and amounts increasing by $500 per year through year 15. At an interest rate of 0.06 per year, the present worth of the maintenance cost is nearest to?
Equipment that costs $15,000 and generates a $5,000 annual return wouldappear to "pay back" on the investment in 3 years. If economists expectinflation to rise 30 percent annually, what will be the estimated return valueat the end of the first year?
Metalfab Pump and Filter, Inc. estimates that the cost of steel bodies for pressure valves will increase by $2 every 3 months. If the cost for the first quarter is expected to be $80, what is the present worth of the costs for a 3-year time period at an interest rate of 3% per quarter?
You see an estimate that hourly wage rates will increase by 6 percent next year. What other information do you need to determine the effect of this wage rate increase on the operating profit margin, and why do you need it?
A machine having a first cost of $20,000 is expected to save $1500 in the first year of operation, and the savings should increase by $200 every year until (and including) the 9th year; thereafter, the savings will decrease by $150 until (and including) the 16th year. Using equivalent uniform annual worth, is this machine economical? Assume a MARR of 10%.