The unit price of personal computers, measured in constant dollars, is expected to decrease at an annual rate of 10%. However, the number of microcomputers purchased by the company is expected to...


The unit price of personal computers, measured in constant dollars, is expected to decrease at an annual rate of 10%. However, the number of microcomputers purchased by the company is expected to increase over a
5-year period at an annual rate of 30%. The unit price of a personal computer is currently $2,000. This year the company will purchase 100 microcomputers at the current price. Using a real interest rate of 8% and an inflation rate of 6%, determine the following: a. The yearly expenditures for personal computers over the 5-year period, measured in constant-worth dollars. b. The yearly expenditures for personal computers over the 5-year period, measured in then-current dollars. c. The single sum equivalent at the end of the current year of the expenditures on microcomputers over the 5-year period, measured in current dollars. d. The future worth equivalent of the expenditures on microcomputers at the end of the 5-year period, measured in then-current dollars.



Jun 10, 2022
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