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An investment related to developing a new product is estimated to have the following costs and revenues in todays or time zero dollars. I=$200,000 I=$200,000

An investment related to developing a new product is estimated to have the following costs and revenues in todays or time zero dollars.

I=$200,000

I=$200,000

C0=$50,000

C1=$150,000

OC=$100,000

.

OC=$100,000

0

1

2

5

Evaluate the project escalated dollar ROR if both capital costs and operating costs are estimated to escalate at 15% per year from time zero with income escalating at 10% per year.

Make constant dollar ROR Analysis of Case A assuming the rate of inflation for the next 5 years will be 10% per year. show all steps, including interpolation if necessary

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