Fin 630 acme company tive value money problems

Therefore, in order to estimate how much the same facility will cost after 14 years, we need to use formula : Cost X (1+I)^n where I = inflation rate , n= number of years from now . Plugging required figures into equation gives us Cost X (1 + 0.A%) ^14 which translates into final answer being Cost X 2.4244.

This means that according to our calculations , building same manufacturing facility fourteen years down line would require approximately 2.4244 times more money than what it currently costs i.e if today’s price tag for such project was SUN Euros then total amount spent on it after 14 years would be approximately 2424400 Euros .

It is important for companies like Acme plan ahead since failure do so may result in either overspending or delaying projects due lack resources thus making them less competitive against rivals operating within same industry while simultaneously having an adverse effect on bottom lines profits.

In conclusion , estimating future costs based on current value along with expected inflation rates helps organizations devise suitable strategies when budgeting purposes thus enabling them make more informed decisions related to capital expenditure going forward.