Determine the average inflation rate for this commodity
1. For a sure commodity, costs enhance by 50% the first 12 months and 30% the second 12 months.
Determine the average inflation rate for this commodity over this two-year interval.
a) 80.zero%
b) 40.5%
c) 39.6%
d) 40.zero%
2. The CPI for 1995 was 152.four and for 2010 it was 218.1. What was the average common inflation rate throughout these years?
a) 2.42%
b) 2.59%
c) three.18%
d) 2.27%
three. To calculate the NPW (at 12 months zero) of N annual money flows of $1000 fixed dollars (ranging from 12 months 1), which of the following equations is/are appropriate? (i: market curiosity rate, f: inflation rate, i’: inflation-free curiosity rate)
a) NPW = $1000 × (P/A, i’, N) — use the equal cost sequence current price issue
b) NPW = $1000 × (P/A1, f, i, N) — use the geometric gradient sequence current price issue
c) Each (a) and (b) are appropriate
d) Neither (a) nor (b) is appropriate
four. Engler Company manufactures specialised blades. Final 12 months the firm manufactured and offered 40,000 blades. Gross sales are down this 12 months to an estimated 35,000 items, nonetheless the firm is unable to lowered its fastened prices from the prior 12 months. Its complete estimated value for the 40,000 items it made final 12 months is as follows:
Direct Materials (variable) $375,000
Direct Labor (variable) $250,000
Manufacturing Overhead
Variable portion $75,000
Fastened portion $90,000
Promoting and Administrative
Variable portion $55,000
Fastened portion $45,000
What’s the break-even worth for the blades this 12 months (given a manufacturing forecast of 35,000 blades)?
a) $29.67
b) $29.04
c) $22.73
d) $25.17
