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Your project fuel expenses are 500$ for years 1, 2 and 3. What it is the...

Your project fuel expenses are 500$ for years 1, 2 and 3. What it is the present worth P of these expenses if the expected general inflation rate is 3% during that period? i = 12%

1) Convert actual payments to constant payments

2) Redraw cash-flow diagram

3) Calculate i’ : 0.12 = i’ + 0.03 + 0.03i’  get i’

4) Calculate P using P/A, i’, n

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