What is the true percentage increase in the cost of machine

Reference no: EM131506637

Question: 1. A large corporation's electricity bill amounts to $400 million. During the next 10 years, electricity usage is expected to increase by 65%, and the estimated electricity bill 10 years hence has been projected to be $920 million. Assuming electricity usage and rates increase at uniform annual rates over the next 10 years, what is the annual rate of inflation of electricity prices expected by the corporation?

2. A machine cost $2,550 on January 1, 2000, and $3,930 on January 1, 2004. The average inflation rate over these four years was 7% per year. What is the true percentage increase in the cost of the machine from 2000 to 2004?

Reference no: EM131506637

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