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Many companies use oil products as a resource in their own business operations ( like airline firms and manufacturers of plastic products ). Mangers of
Many companies use oil products as a resource in their own business operations (like airline firms and manufacturers of plastic products). Mangers of these firms will keep a close watch on how rising oil prices will impact their costs. The interest rate in the PV/FV equations in chapter 4 can also be interpreted as a growth rate in sales, costs, profits, and so on.
- Using the 1949 oil price and the 1969 oil price, compute the annual growth rate in oil prices during the 20-year period.
- Compute the growth rate between 1969 and 1989 and between 1989 and 2017.
- Given the price of oil in 2017 and your computed growth rate between 1989 and 2017, compute the estimated future price of oil in 2020 and 2025. 1949 - $2.54 1969 - $3.09 1989 - $15.86 2017 - $50.88
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