The prospective maintenance expenses for a commercial heating, ventilating, and air-conditioning (HVAC) system are estimated to be $12,200 per year in base-year dollars (assume that b = 0). The total...

The prospective maintenance expenses for a commercial heating, ventilating, and air-conditioning (HVAC) system are estimated to be $12,200 per year in base-year dollars (assume that b = 0). The total price escalation rate is estimated to be 7.6% for the next three years (e_1,2,3
= 7.6%), and for years four and five it is estimated to be 9.3% (e_4,5
= 9.3%). The general price inflation rate ( f ) for this five-year period is estimated to be 4.7% per year. Develop the maintenance expense estimates for years one through five in actual dollars and in real dollars, using e_j
and e_j
values, respectively.

Extracted text: TABLE 8-4 Example 8-8 Calculations (1) End of (2) A$ Adjustment (e;) (3) (4) R$ Adjustment (e) (5) Maintenance Maintenance Year, k Expenses, A$ Expenses, R$ $12,200(1.076)! 12,200(1.076)2 12,200(1.076)³ 12,200(1.076)³ (1.093)! 12,200(1.076)³ (1.093)² $12,200(1.0277)! 12,200(1.0277)2 12,200(1.0277)3 12,200(1.0277)³ (1.0439)' 12,200(1.0277)³ (1.0439)² 1 S13,127 $12,538 2 14,125 12,885 3 15,198 13,242 16,612 18,157 4 13,823 5 14,430