Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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A renewable energy industry is one of the promising sectors in future and play a major role in the vision 2030. If a specialized company in energy planning to
upgrade their equipment now to meet future demand at cost of $200,000 or they purchase the upgrade package three years from now at cost of $300,000.
Assume that the minimum attractive rate of return is 12% per year and the inflation is 3% per year. If the company decided to purchase the upgrade 3 years from
now considering inflation what will be the cost?
A renewable energy industry is one of the promising sectors in future and play a major role in the vision 2030. If a specialized company in energy planning to upgrade their equipment now to meet future demand at cost of $200.000 or they purchase the upgrade package three years from now at cost of $300,000. Assume that the minimum attractive rate of return is 12% per year and the inflation is 3% per year. If the company decided to purchase the upgrade 3 years from now without considering inflation what will be the cost?
The cost of constructing a roundabout (R/A) in a low-traffic residential neighborhood 5 years ago was $625,000. A civil engineer designing another R/A that is almost the same design estimates the cost today will be $740,000. If the cost had increased only by the inflation rate over the 5 years, determine the inflation rate per year.
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