OXAGON is an industrial city that will be built in NEOM. One of the factories interested to join there has been producing a dependable product used by farmers, municipalities, and suburbanites alike to control grass in fields and gardens. Contributions to NEOM revenue have been minimized by international dumping of generic glyphosate, as announced in mid- 2021 due to Pandemic of COVID-19. The factory sales price was decreased from $4.,249 to $58,856 per gallon to compete with the highly competitive pricing, and it is expected that the international price will be around $6,702 per gallon. Assume when the price was set at $4,249 per gallon, there was a prediction that in 5 years the price would inflate to $9,852 per gallon. Determine the interest adjusted rate for inflation, if the inflation is 9% and the interest is 7% per year real return is expected by the factory.

Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
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OXAGON is an industrial city that will be built in NEOM. One of the factories interested to join
there has been producing a dependable product used by farmers, municipalities, and
suburbanites alike to control grass in fields and gardens. Contributions to NEOM revenue
have been minimized by international dumping of generic glyphosate, as announced in mid-
2021 due to Pandemic of COVID-19. The factory sales price was decreased from $4,249 to
$58,856 per gallon to compete with the highly competitive pricing, and it is expected that the
international price will be around $6,702 per gallon. Assume when the price was set at $4,249
per gallon, there was a prediction that in 5 years the price would inflate to $9,852 per gallon.
Determine the interest adjusted rate for inflation, if the inflation is 9% and the interest is 7%
per year real return is expected by the factory.
Transcribed Image Text:OXAGON is an industrial city that will be built in NEOM. One of the factories interested to join there has been producing a dependable product used by farmers, municipalities, and suburbanites alike to control grass in fields and gardens. Contributions to NEOM revenue have been minimized by international dumping of generic glyphosate, as announced in mid- 2021 due to Pandemic of COVID-19. The factory sales price was decreased from $4,249 to $58,856 per gallon to compete with the highly competitive pricing, and it is expected that the international price will be around $6,702 per gallon. Assume when the price was set at $4,249 per gallon, there was a prediction that in 5 years the price would inflate to $9,852 per gallon. Determine the interest adjusted rate for inflation, if the inflation is 9% and the interest is 7% per year real return is expected by the factory.
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