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
