A small company heats its building and spends $8,500 per year on natural gas for...
90.2K
Verified Solution
Link Copied!
Question
Finance
A small company heats its building and spends $8,500 per year on natural gas for this purpose. Cost increases of natural gas are expected to be 8% per year starting one year from now i.e., the first cash flow is $9,180 at EOY one). Their maintenance on the gas furnace is $355 per year, and this expense is expected to increase by 12% per year starting one year from now i.e., the first cash flow for this expense is $397.60 at the EOY one). If the planning horizon is 15 years, what is the total annual equivalent expense for operating and maintaining the furnace? The interest rate is 18% per year. Click the icon to view the interest and annuity table for discrete compounding when i = 8% per year. Click the icon to view the interest and annuity table for discrete compounding when i= 12% per year. Click the icon to view the interest and annuity table for discrete compounding when i= 18% per year. The total annual equivalent expense for operating and maintaining the furnace is $64.64 thousands. (Round to two decimal places.)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
