A small company heats its building and spends 7800 per year


A small company heats its building and spends ?$7,800 per year on natural gas for this purpose. Cost increases of natural gas are expected to be 10?% per year starting one year from now? (i.e., the first cash flow is ?$8580 at EOY? one). Their maintenance on the gas furnace is ?$350 per? year, and this expense is expected to increase by 15?% per year starting one year from now? (i.e., the first cash flow for this expense is ?$402.50 at the EOY? one). If the planning horizon is 15 ?years, what is the total annual equivalent expense for operating and maintaining the? furnace? The interest rate is 18?% per year. The total annual equivalent expense for operating and maintaining the furnace is ?$ thousands.? (Round to two decimal? places.)

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Financial Management: A small company heats its building and spends 7800 per year
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