Question 1 Exam June 2012

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November 9, 2016 at 1:14 pm #348207
Miguel
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Hi John,

I have a silly question im starting with the practical review as I have already gone through the notes a couple of times, my question is why in the year 2 of the part a-project 1, the price is 25.96, the price is set as 24 and with the inflation(4%) is 24.96 ?
November 9, 2016 at 2:10 pm #348223
John Moffat
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By time 2 there are two years of inflation.

So the actual selling price = 24.00 x (1.04^2) = 25.96.
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