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15. Chapter 10. A logistics company is budgeting for its fuel usage for the next...

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Accounting

15. Chapter 10. A logistics company is budgeting for its fuel usage for the next 4 years. Current fuel costs are ( $ 250,000 ) per year; it believes that fuel costs will rise ( 5 % ) per year due to inflation over the next four years. Assuming the logistics company uses a ( 12 % ) combined return on investment, what would be the present worth of its fuel costs for years 1-4? Calculate MARR. Calculate both the constant dollar ( left(C_{k} ight) ) and then-current dollar ( left(T_{k} ight) ) cash flows from years ( 1-4 ) in the Table below. Then calculate: Present Worth ( left(C_{k} ight) ) Present Worth ( left(T_{k} ight) ) How do the two PW values compare?
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15. Chapter 10. A logistics company is budgeting for its fuei usage for the next 4 years. Current fuel costs are $250,000 per year; it believes that fuel costs will rise 5% per vear due to inflation over the next four vears. Assuming the logistics company uses a 12W combined return on investment, what would be the present worth of its fuel costs for years 1-4? Calculate MARR. Calculate both the constant dollar (C1) and then-current dollar (T1) cash flows from years 1.4 in the Table below. Then calculate: Present Worth (C) Present Worth (T.)

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