The data shown below are the cost of machine A and B. Machine A Machine B P 22,000 P 16,000 P 4,000 P 31,000 P 18,000 P 5,000 First Cost Annual Operating Cost Salvage Value Life (years) Real interest rate per 5% 6% year Inflation rate per year 4% 3% Compute the present worth of machine B considering the inflation rate
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![Problem 1
The data shown below are the cost of machine A and B.
Machine A
Machine B
P 22,000
P 16,000
P 4,000
P 31,000
P 18,000
P 5,000
First Cost
Annual Operating Cost
Salvage Value
Life (years)
Real interest rate per
3
5%
6%
year
Inflation rate per year
4%
3%
Compute the present worth of machine B considering the inflation rate.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd766d8f3-72d8-4283-b2bb-2a7986741a74%2F6392d85f-7463-4f4a-b7e0-6b15b3c8d829%2Fyzdutqq_processed.jpeg&w=3840&q=75)
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- A software company’s labor requirements currently cost $350,000/year. The labor-hour requirements are expectedto increase by 10 percent per year over the next 5 years. If inflation is 4 percent, determine the labor costs after5 years usinga. then-current dollars.b. constant-worth dollars.MEEN1C | CLO 1 Prices of gasoline in the United States are forecast to increase by 7% in 2030. If the current average prices of gasoline in the United States stand at $3 per gallon, in 2020, What would be the average annual inflation rate over the forecast period. O The average annual rate of increase in the price of gasoline is 10% O The average annual rate of increase in the price of gasoline is 0.68% O The average annual rate of increase in the price of gasoline is 96.00% O The average annual rate of increase in the price of gasoline is 1.10%5. Assume that relative purchasing power holds and that the inflation rate between year 1 and year 2 is 4% in the U.S. and 2% in Europe. Fill in the remaining spaces in the table. Year 1 2 (1) PUS ($) 1.5 (2) Es/e 1.2 (3) PEur(e) 1.25 (4) PEUR($) (5) qUS/EUR
- pls ans as soon as possible The average rate of inflation since 1970 until 2018 is 3.87%. In 1970, a gallon of gas could be bought for $0.25. Today a gallon of gas can be bought for $2.21. Has the cost of gas risen faster or slower than the rate of inflation?1. A potato chips snack business existing for the past 11 years is to be sold to you by another businessman at 28 Million pesos. It is estimated to last for another 9 years with an annual predicted gross sale of 20.02 million pesos annually and yearly total cost of 1.91 million pesos. Annual inflation rate: around 3.4 to 4.6 %, T-bill rate: around 3.1 to 3.9%. a. Would you buy the said offered business? b. Why? Please show all calculations. 2. The Philippine Government has constructed a new railway system (cost of construction undisclosed). The operation of the said railway system is offered for public bidding at a minimum bid price of 110 Million pesos for a contract of 25 years. Upon diligent research, you have learned that the railways system will yield a yearly net gross income of 34.9 million pesos and a yearly maintenance cost of 3.26 million pesos. Annual average inflation rate is around 2.2 to 4.1% and T-bill rate is 3.8 to 4.3%. a. Would you participate in the bidding process?…Question 11 Given the following numbers for this economy. What is the average annual inflation rate between base year and year 4 as per the CPI method? Base year Year + 5 Year + 4 Basket Quantities Price Price Price Product A 1 220 250 290 Product B 70 75 85 Product C 20 15 15 14 Product D 20 30 31 33 Product E 100 5 5.2 5.3 4.44% (B) 18.44% c) 1.11% (D) 9.17% E) 4.53% O © © © ©
- Somebody has bought US Dollar with one-third of his money and Euro with one-third. The remained one-third is remained as TL. Dollar has gained value over national currency by D % each month and Euro E % each month. The average monthly inflation rate is Y. Find the percentage loss/gain of him/her at the end of a year D E Y 2,8 5,2 1,74. What is the uninflated present worth of a P 200 000 future value in two years if the average inflation rate is 6 and interest rate is 10% ANE15.0% 14.0% 13.0% 12.0% 11.0% . 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Inflation Rate (n) 0 1,000 2,000 3,000 000't 5,000 6,000 000'2 8,000 9,000 000'0 LRAS 3 11,000 12,000 13,000 Real GDP (Y) This policy causes the inflation rate to drop to 14,000 9 AD SRAS 15,000 16,000 17,000 18,000 19,000 20,000 Short Run and Consider the graph above. It is also in the files folder under the name the Long Run. The graph pertains to a hypothetical country. The central bank in this country (also called the Fed) follows an inflation targeting policy. The current target inflation rate in 8 percent. The natural rate of unemployment is 5 percent and Okun's alpha is 8. Finally, the president of the country appoints a new chairperson for the central band and the chair decides to bring the runaway inflation under control (as the U.S. FED did in 1980). The new chair realizes that 8 percent inflation target is way too high. So, s/he decides to reduce the long-term target inflation rate to 2…
- John bought his car 3 years ago worth 230,000, his friend Joshua bought the same model this year costing 320,000. Compute for the inflation rate. Rate: % (2 decimal places)Question 8 Given the following numbers for this economy, what is the inflation rate between year 4 and year 5 as per the CPI method? Base year Year + 4 Year + 5 Basket Quantities Price Price Price Product A 220 250 290 Product B 70 75 85 Product C 20 15 15 14 Product D 20 30 31 33 Product E 100 5.2 5.3 A -4.34% В 18.44% C) 9.17% D none E 4.53%Table 2 Price per Unit in 2005 $2.00 $2.00 Units Purchased 2007 2008 Blueberries 9007 $2.10 $2.40 $2.50 $3.00 %243.50 $4.00 8. Pincapples Cheese 007$ $42.50 $3.00 $2.50 7. Refer to Table 2. The lowest inflation rate is between the years 2005 and 2006. cannot be determined from the given information 2006 and 2007. 2007 and 2008.
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