Find the dollar amount of vandalism

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The warehouses of the Alpha corporation have experienced numerous vandalism losses, which are becoming increasingly expensive to repair. Assume that last year (Year 1) Alpha suffered 100 vandalism losses and that the average cost of repair for each of these losses was $100. Alpha's risk management professional estimates that the number of vandalism losses will increase by 10 cases and that the cost of repair for the average vandalism loss will increase by 10% per year.

(a) What was the dollar amount of vandalism losses last year (Year 1) in nominal dollars for last year?

(b) What is the projected dollar amount of vandalism losses for the current year (Year 2) in current year (Year 2) dollar?

(c) What will be the dollar amount of losses in nominal dollars (Year 5 dollars) in Year 5?

Reference no: EM132899565

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