A self-employed chemical engineer is on contract with Dow Chemical, currently working in a relatively high- inflation country. She wishes to calculate a project's Present Worth with estimated costs of Php1,35,000 now and Php120,000 per year for 5 years beginning 1 year from now with increases of 12% per year thereafter for the next 8 years. Use a real interest rate of 15% per year to make the calculations (a) without an adjustment for inflation and (b) considering inflation at a rate of 11% per year.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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A self-employed chemical engineer is on contract with Dow Chemical, currently working in a relatively high-
inflation country. She wishes to calculate a project's Present Worth with estimated costs of Php1,35,000 now and
Php120,000 per year for 5 years beginning 1 year from now with increases of 12% per year thereafter for the next 8
years. Use a real interest rate of 15% per year to make the calculations (a) without an adjustment for inflation and
(b) considering inflation at a rate of 11% per year.
Transcribed Image Text:A self-employed chemical engineer is on contract with Dow Chemical, currently working in a relatively high- inflation country. She wishes to calculate a project's Present Worth with estimated costs of Php1,35,000 now and Php120,000 per year for 5 years beginning 1 year from now with increases of 12% per year thereafter for the next 8 years. Use a real interest rate of 15% per year to make the calculations (a) without an adjustment for inflation and (b) considering inflation at a rate of 11% per year.
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