A company estimates that the cost of new capacity additions follows the function f(y) = 0.0358y0.66,...

 

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A company estimates that the cost of new capacity additions follows the function f(y) = 0.0358y0.66, where y is the number of units and f(y) in millions of dollars. Demand is increasing at a rate of 3,500 units per year. The company uses a 10% per year interest rate. What is the present value of the cost of the next nine capacity additions? A company estimates that the cost of new capacity additions follows the function f(y) = 0.0358y0.66, where y is the number of units and f(y) in millions of dollars. Demand is increasing at a rate of 3,500 units per year. The company uses a 10% per year interest rate. What is the present value of the cost of the next nine capacity additions?

Answer rating: 100% (QA)

SOLUTION To calculate the present value of the cost of the next nine capacity additions we need to discount the future costs to their present value us... View the full answer