As the owner of Beanie Bob's Basement Brewery, you are interested in a construction project to increase production to offset competition from your cross-town rival, Bad Brad's Brewery and Pool hall. Construction cost percentage increases, as well as current cost estimates, for required construction costs are given in the table below over a three year period. Use a market interest rate of 25%, and assume that general price inflation is 5% over the 3-year period.

(a) What would the costs be for labor in Years 1, 2, and 3?

(b) What is the average percentage increase of labor cost .over the 3-year period?

(c) What is the present worth of the insulation cost of this project?

(d) Calculate the future worth of the labor and insulation material cost portion of the project.

(e) Calculate the present worth of the total construction project for Beanie Bob.

Cost If Incurred Cost Percentage Increase Item Today Year Year 2 Year 3 $120.000 4.3% 3.2% 6.6% 14,000 2.0 2.5 3.O Strucniral metal/concrete Roofing materiais Heating/plumbing35.000 1.6 2.13.6 equipment/ixnires Insulation materi Labor 9,000 5.8 6.0 7.5 85,00) 5.0 4.5 4.5