A mini-wind tunnel for calibrating vane or hotwire anemometers costs $3750 in 2011 when the Marshall and Swift (M&S) equipment cost index value was 1490.2. If True-Tech Instruments estimated the cost of a wind tunnel twice as large to be $10,200 in 2016, what did it expect the equipment cost index value to be, provided the equipment cost increased accordingly? The cost-capacity equation exponent is 0.89.
A mini-wind tunnel for calibrating vane or hotwire anemometers costs $3750 in 2011 when the Marshall and Swift (M&S) equipment cost index value was 1490.2. If True-Tech Instruments estimated the cost of a wind tunnel twice as large to be $10,200 in 2016, what did it expect the equipment cost index value to be, provided the equipment cost increased accordingly? The cost-capacity equation exponent is 0.89.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A mini-wind tunnel for calibrating vane or hotwire
anemometers costs $3750 in 2011 when the
Marshall and Swift (M&S) equipment cost index
value was 1490.2. If True-Tech Instruments estimated
the cost of a wind tunnel twice as large to be
$10,200 in 2016, what did it expect the equipment
cost index value to be, provided the equipment cost
increased accordingly? The cost-capacity equation
exponent is 0.89.
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