Decide the common inflation price for this commodity
1. For a sure commodity, costs enhance by 50% the primary yr and 30% the second yr.
Decide the common inflation price for this commodity over this two-year interval.
2. The CPI for 1995 was 152.four and for 2010 it was 218.1. What was the common basic inflation price throughout these years?
three. To calculate the NPW (at yr zero) of N annual money flows of $1000 fixed dollars (ranging from yr 1), which of the next equations is/are right? (i: market rate of interest, f: inflation price, i’: inflation-free rate of interest)
a) NPW = $1000 × (P/A, i’, N) — use the equal cost sequence current value issue
b) NPW = $1000 × (P/A1, f, i, N) — use the geometric gradient sequence current value issue
c) Each (a) and (b) are right
d) Neither (a) nor (b) is right
four. Engler Company manufactures specialised blades. Final yr the corporate manufactured and offered 40,000 blades. Gross sales are down this yr to an estimated 35,000 models, nonetheless the corporate is unable to decreased its mounted prices from the prior yr. Its whole estimated value for the 40,000 models it made final yr is as follows:
Direct Materials (variable) $375,000
Direct Labor (variable) $250,000
Variable portion $75,000
Mounted portion $90,000
Promoting and Administrative
Variable portion $55,000
Mounted portion $45,000
What’s the break-even worth for the blades this yr (given a manufacturing forecast of 35,000 blades)?