A manufacturer's annual labor costs are currently $1.2M per year. Costs are expected to increase by 10% per year over the next six years due to added manpower. Inflation is estimated to be 5% per year over the next six years.
A) What will the manufacturer's labor costs be in 6 years, expressed in then-current/actual dollars?
B) What will the manufacturer's labor costs be in 6 years, expressed in constant dollars?
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