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13 July, 09:18

Omega Instruments has budgeted $300,000 per year to pay for certain ceramic parts over the next 5 years. If the company expects the cost of the parts to increase uniformly according to an arithmetic gradient of $10,000 per year, what is it expecting the cost to be in year 1, if the interest rate is 10% per year?

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  1. 13 July, 10:12
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    281,281.28

    Explanation:

    expected cost 300,000 + 10,000 = 310,000

    with an inerest rate of 10%

    discount value equals to 281,281.28
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