Cost increases of natural gas

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A small company heats its building and spends ?$8,000 per year on natural gas for this purpose. Cost increases of natural gas are expected to be 10?% per year starting one year from now? (i.e., the first cash flow is ?$8,800 at EOY? one). Their maintenance on the gas furnace is ?$350 per? year, and this expense is expected to increase by 15?% per year starting one year from now? (i.e., the first cash flow for this expense is ?$402.50 at the EOY? one). If the planning horizon is 13 ?years, what is the total annual equivalent expense for operating and maintaining the? furnace? The interest rate is 20?% per year.

The total annual equivalent expense for operating and maintaining the furnace is $_______thousands.?

Reference no: EM131239710

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