AC-Delco makes auto batteries available to General Motors dealers through privately owned distributorships. In general, batteries are stored throughout the year, and a 5% cost increase is added each year to cover the inventory carrying charge for the distributorship owner. Assume you own the City Center Delco facility. Make the calculations necessary to show which of the following statements are true and which are false about battery costs.a. The amount of $98 now is equivalent to a cost of $105.60 one year from now.b. A truck battery cost of $200 one year ago is equivalent to $205 now.c. A $38 cost now is equivalent to $39.90 one year from now.d. A $3000 cost now is equivalent to $2887.14 one year ago.e. The carrying charge accumulated in 1 year on an investment of $2000 worth of batteries is $100.
AC-Delco makes auto batteries available to General Motors dealers through privately owned distributorships. In general, batteries are stored throughout the year, and a 5% cost increase is added each year to cover the inventory carrying charge for the distributorship owner. Assume you own the City Center Delco facility. Make the calculations necessary to show which of the following statements are true and which are false about battery costs.
a. The amount of $98 now is equivalent to a cost of $105.60 one year from now.
b. A truck battery cost of $200 one year ago is equivalent to $205 now.
c. A $38 cost now is equivalent to $39.90 one year from now.
d. A $3000 cost now is equivalent to $2887.14 one year ago.
e. The carrying charge accumulated in 1 year on an investment of $2000 worth of batteries is $100.
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