Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Question
Chapter 8, Problem 55FE
To determine
Calculate the increase percentage of cost.
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QUESTION-2
Someone calculated the future worth of his investment in term of today's dollars. The
obtained result was $(945,895. The life of the investment is expected to be 20 years. The
average annual inflation rate along this period is 7%. If it is known that the investor earns
14% per year from this investment, what is the first cost of the investment?
(c) Seasonally;
(d) Frictionally.
Q.1.9
If the CPI was 106 in 2013 and 116 in 2014, the inflation rate in 2014 was:
(a) 106%;
For the next four years, a family anticipates buying $1.000 worth of groceries each year. If
inflation is expected to be 3%/year, what are the constant-worth cash flow and the then-
current cash flow required to purchase the groceries?
Constant-worth
(C.)
$1,000
$1.000
$1,000
$1,000
Then-current
(T.)
$1.000 x 1.03= $1,030
$1.030 x 1.03 $1,060.90
$1,060.90 x 1.03 = $1,092.73
$1,092.73 x 1.03 = $1,125.51
Year
(k)
%3D
%3D
%3D
The then-current equivalent cash flow will be
T = T,(1+)* for k 1,..,n
Since C = Ta. so
T = C(1+)* for k = 1,.,n
Using the cash flows of Example 1, determine the present worth of the grocery
purchase using
a. constant-worth analysis (in other words, using the constant-worth cash flow)
b. then-current analysis (in other words, using the then-curent cash flow)
The inflation rate is 3% per year and the real time value of money is 15%.
Chapter 8 Solutions
Engineering Economy
Ch. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10P
Ch. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - A commercial building design cost 89/square-foot...Ch. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Prob. 44PCh. 8 - Prob. 45PCh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49SECh. 8 - Prob. 50SECh. 8 - Prob. 51SECh. 8 - Prob. 52CSCh. 8 - Suppose the cost of electricity is expected to...Ch. 8 - Prob. 54CSCh. 8 - Prob. 55FECh. 8 - Prob. 56FECh. 8 - Prob. 57FECh. 8 - Prob. 58FECh. 8 - Prob. 59FECh. 8 - Prob. 60FECh. 8 - Prob. 61FE
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