A top-of-the-line 3D printer costs $40,000 today. The manufacturer plans to raise the price so that a real rate of return of 5% per year is realized. In a period of 4% per year inflation, how much will the printer cost 3 years from now in terms of CV dollars?

What will be an ideal response?


Since future cost is a CV amount, future amount will increase by real i of 5%; inflation of 4% is not used in the calculation.

F = 40,000(F/P,5%,3)
= 40,000(1.1576)
= $46,304

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What will be an ideal response?

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Answer the following statement true (T) or false (F)

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What will be an ideal response?

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