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A company estimates that the cost of new capacity additions follows the function f(y) = 0.0358y0.66, where y is the number of units and
A company estimates that the cost of new capacity additions follows the function f(y) = 0.0358y0.66, where y is the number of units and f(y) in millions of dollars. Demand is increasing at a rate of 3,500 units per year. The company uses a 10% per year interest rate. What is the present value of the cost of the next nine capacity additions?
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SOLUTION To calculate the present value of the cost of the next nine capacity additions we need to discount the future costs to their present value us...
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Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
9th Edition
1337614689, 1337614688, 9781337668262, 978-1337614689
