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Could you please let me know why the fixed cost had been inflated from year 2 onwards and not from year 1? Sales and variables costs were inflated from year 1.
They have been inflated in the first year.
Note 1 of the question says that they are $150,000 per year.
Note 6 of the question says that they inflate at 3% per year.To the nearest thousand, $150 + (3% x 150) = $155
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