A small company heats its building using a gas furnace. It expects to spend $9,020 on natural gas this first year. The cost of the natural gas is expected to increase by 10% per year every subsequent year. There is also the maintenance. cost on the gas furnace which is expected to be $920.00 in the first year and to increase by 15% per year every subsequent year. The planning horizon is 15 years and the company uses an annual interest rate of 20% for economic analysis of its investments. (a) The projected annual cost of natural gas in year 15 is $ 34,253 (Round to nearest dollar) (b) The projected annual maintenance cost of the furnace in year 15 is $ 6510 (Round to nearest dollar) (c) The total present worth of operating and maintaining the furnace over the 15 years is $(Round to nearest dollar)

A small company heats its building using a gas furnace. It expects to spend $9,020 on natural gas this first year. The cost of the natural gas is expected to increase by 10% per year every subsequent year. There is also the maintenance. cost on the gas furnace which is expected to be $920.00 in the first year and to increase by 15% per year every subsequent year. The planning horizon is 15 years and the company uses an annual interest rate of 20% for economic analysis of its investments. (a) The projected annual cost of natural gas in year 15 is $ 34,253 (Round to nearest dollar) (b) The projected annual maintenance cost of the furnace in year 15 is $ 6510 (Round to nearest dollar) (c) The total present worth of operating and maintaining the furnace over the 15 years is $(Round to nearest dollar)

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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