Question
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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