Consider escalation rate of 10% for both cost and incomes for the following cash flow: |Co=$8,000||1=$2,000|12=$2,000||3=$3,000||4=$2,000|15=$2,500| 0 1 2 L=$1,000 3 4 5 C: Cost, I: Income, L: Salvage 1) Calculate the escalated dollar cash flow. 2) Calculate the ROR for escalated dollar. 3) Calculate NPV for escalated dollar considering 8% escalated dollar minimum rate of return Please, explain your work in detail including all the required equations and calculations.
Consider escalation rate of 10% for both cost and incomes for the following cash flow: |Co=$8,000||1=$2,000|12=$2,000||3=$3,000||4=$2,000|15=$2,500| 0 1 2 L=$1,000 3 4 5 C: Cost, I: Income, L: Salvage 1) Calculate the escalated dollar cash flow. 2) Calculate the ROR for escalated dollar. 3) Calculate NPV for escalated dollar considering 8% escalated dollar minimum rate of return Please, explain your work in detail including all the required equations and calculations.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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