Engineering Economic Analysis

-, 452 INFLATION ANDPRICECHANGE For example, consider the LCI for the year 1980. We calculate the LCI as follows. LCI year 1980= ...

Price Change with Indexes 453 Composite Versus Commodity Indexes 'Cost indexes, in general, come in two types: commodity-specifi ...

-- - - --- 454 INFLATION AND PRICECHANGE - Average price change(LSI) is 1229= 1046(1 +i)10 solving forifor saddles =1.6% per yea ...

15 o 1973 1976 1979 1982 1985 1988 1994 1997 2000 2002 Year 1991 FIGURE 14-5 CPI Inflation Rate over 30 years (1973-2002). Compo ...

456 INFLATION AND PRICECHANGE How to Use Price Indexes in Engineering Economic Analysis One may question the usefulness ofhistor ...

~ _.. ~.~. ~..~. ...~.._~ h..'~_~.'~.. ~~ ~._ .~~ ~.~_.~.~~..~.~~.._-._----- Cash FlowsThat Inflate at Different Rates 457 On yo ...

In Example 14-6 several parameters changed at different rates over the period of the economic study.By using the respectiveindiv ...

Different Inflation Ratesper Period 459 EUAC - [19,102(PI F,20%, 1) + 20,349(P I F,20%, 2) +20,238(P I F,70%, 3) + 20,197(P IF, ...

460 INFLATION AND PRICECHANGE I I Inflation Effect on After-TaxCf!'.c~l(lti9.ns Earlier we noted the impact of inflation on ...

Inflation Effect on After-Tax Calculations 461 After- Tax R~te of Return, No Inflation Year o 1-6 Before-Tax Cash Flow -$12,000 ...

462 INFLATION AND PRICECHANGE benefitsin the inflationsituation increasedin proportion to the inflation.This exampleshows th ...

Using Spreadsheets for Inflation Calculations 463 SOlUT:ION' The data for labor costs can be stated so that no inflation needs t ...

(^464) INFLATION AND PRICE CHANGE I , I I II~ j :!;; FIct.URE=:14-7, e'After-taxJRR8::.with MAGRS:anddn:flation~;:;' - .. J I I ...

466 INFLATION AND PRICECHANGE 14-5 What is the Consumer Price Index (CPI)? What is the difference between commodity specific and ...

Problems 467 14-18 (a) Compute the equivalent annual inflation rate, based on the consumer price index, for the period from 1981 ...

468 INFLATION AND PRICECHANGE I the end of 3 years, Sam sold the house for $205,000. After paying off the two loans and the re ...

Problems 469 will cost $160 per month; insurance and maintenance also inflating at 5% ,will cost $50 per month. The home will ap ...

470 INFLATION AND PRICECHANGE --- ! (b)What is theaverage percentage increaseof labor cost .over the 3-year period?. (c) Wha ...

Problems 471 Assume Sam's incremental income tax rate re- mains at 34:.%for all ordinary taxable income related to the property. ...

<"". ~;~~":- - ~-'-:-'_.~'><';--~ :::-:-g-~...~ t'~~Ji~~~~~~~f~~~~~~. After Completing This Chapter... The student shou ...