Calculating rate of growth in fuel costs

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It costs $2600 to insulate a factory. Next year, the fuel savings will be $220. Every year after this, the expense of fuel is expected to increase by the rate g. If the discount rate is 12 percent, what rate of growth in fuel costs justifies going ahead with the insulation plan? [Suggestion: Make sure that the rate of growth and discount rate are aligned in terms of periodss.]

Reference no: EM1373701

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