Question: Hello can anyone please help me with this question, Thanks in advance As the owner of Beanie Bob's Basement Brew- ery, you are interested in

 Hello can anyone please help me with this question, Thanks inadvance As the owner of Beanie Bob's Basement Brew- ery, you are

Hello can anyone please help me with this question, Thanks in advance

interested in a construction project to increase production to offset competition fromyour crosstown rival, Bad Brad's Brewery and Poolhall. Construction cost percentage increases,

As the owner of Beanie Bob's Basement Brew- ery, 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. Cost if Cost Percentage Increase Incurred Item Today Year 1 Year 2 Year 3 Structural $120,000 4.3% 3.2% 6.6% metal/concrete Roofing materials 14,000 2.0 2.5 3.0 Heating/plumbing ere 35,000 1.6 2.1 3.6 equipment/fixtures Insulation material 9,000 5.8 6.0 7.5 Labor 85,000 5.0 4.5 4.5(a) What would the costs be for labor in Years 1, 2, and 3? (b) What is the average percentage increase of labor cost over the 3-year period? (c) What is the present worth of the insulation cost of this project? (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

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!