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As the owner of Beanie Bob's Basement Brewery, you are interested in a construction project to increase production to offset competition from your crosstown rival, Bad Brad's Brewery and Poolhall. Construction cost percentage increases, as well as current cost estimates, are given for a 3-year period. Use a market interest rate of 25%, and assume that general price inflation is 5% over the 3-year period.

362_Construction cost percentage increases.png

(a) What would the costs be for labor in Years 1, 2, and 3?

(b) What is the average percentageincrease of labor cost over the 3-year period?

(d) Calculate the future worth of the labor and insulation material cost portion of the project.

(e) Calculate the present worth of the total construction project for Beanie Bob.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92639228

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