Question

In 2002 Acme Chemical purchased a large pump for

Answer 1

Answer:

$151094

Explanation:

Solution

Recall that:

Acme Chemical in 2002 purchased a large pump worth of = 112,000

The estimation for the pump to the industrial pump index is =100

The index in 2002= 212

The current index is = 286

k = is the  reference year for which cost or price is known.

n =  the year for which cost or price is to be estimated (n>k).

Cn = the estimated cost or price of item in year n.

Ck =  the cost or price of item in reference year k.

Cn = Ck * (In / Ik )

Now,

We find the estimated cost of the new pump which is stated as follows:

Cn = (112,000 * 286) /212

=32032000/212

=$151094

Therefore, the estimated cost of the new pump is $151094