Global steel prices have a year-over-year inflationary rate increase of 12.4 percent. Tube Fab purchased $700,000 of a particular carbon steel during the year just ended right now. Their business has been increasing, and they intend to purchase 20 percent more steel each year, over the previous year’s purchase, for the next 5 years. Tube Fab earns a real rate of 16 percent on their money.

a. Determine the then-current amounts they will pay for steel at the end of each of the next 5 years.

b. Determine the constant value amounts they will pay for steel at the end of each of the next 5 years.

c. Determine Tube Fab’s PW of expenditures over the next 5 years using then-current dollars.

d. Determine Tube Fab’s PW of expenditures over the next 5 years using constant-value dollars.