Four hundred pounds of copper are used in a typical 2,200-square-foot newly constructed house. Today’s copper price is $3.75 per pound. Solve, a. If copper prices are expected to increase 8.5% per year (on average), what is the cost of copper going to be in a new 2,400-square-foot house built 10 years from now? Use a cost-capacity factor of 1.0. b. To minimize building costs, do you think that another less-expensive material (e.g., aluminum) will be substituted for copper in the electrical wiring in new homes?
Four hundred pounds of copper are used in a typical 2,200-square-foot newly constructed house. Today’s copper price is $3.75 per pound. Solve, a. If copper prices are expected to increase 8.5% per year (on average), what is the cost of copper going to be in a new 2,400-square-foot house built 10 years from now? Use a cost-capacity factor of 1.0. b. To minimize building costs, do you think that another less-expensive material (e.g., aluminum) will be substituted for copper in the electrical wiring in new homes?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Four hundred pounds of copper are used in a typical 2,200-square-foot newly constructed house. Today’s copper price is $3.75 per pound. Solve, a. If copper prices are expected to increase 8.5% per year (on average), what is the cost of copper going to be in a new 2,400-square-foot house built 10 years from now? Use a cost-capacity factor of 1.0. b. To minimize building costs, do you think that another less-expensive material (e.g., aluminum) will be substituted for copper in the electrical wiring in new homes?
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