AVTO, Dec 03

This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.

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January 31, 2018 at 2:56 am #434096
mansoor
Participant
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Good Morning!

We are not inflating the given labor/component/sales costs by the inflation of 20% in year 1.

Is it because the costs given ARE for year 1?
where as normally we are given the costs at year 0 which requires the figures to be inflated?

regards
January 31, 2018 at 10:46 am #434163
John Moffat
Keymaster
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Yes – the costs are given for year 1 and so it is only later years that inflate.

This is very common in the exam. We only inflate in the first year if the costs are given at current prices.
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