Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 27

The cost associated with manufacturing high-performance lubricants closely follows the cost of crude oil. For the last 10 years, a small, independent refiner had a cost of $3.4 million in years 1 through 3, after which the cost increased by 3% per year through this year. Determine the current equivalent worth (i.e., now ) of the manufacturing cost, using an interest rate of 10% per year. Show both
a) hand and b) spreadsheet solutions.