Respuesta :
$2.6 million in 2000 dollars is more than what it would have cost to restore the courthouse.
The price index is the average price for a certain class of products or services during a particular time period.
An asset's current cost is determined by multiplying the base year cost by the current year's price index.
It was 2000.
Hospital: $2,635,417 ($500,000 x 126.5 / 24)
Courthouse: 1,700,000 $ x 126.5/108 = 1,991,204
The hospital will cost $2.6 million.
2,635,417 minus 1,991,204, or $644,213, is the difference with the courthouse. The cost of the hospital is $644,21300 more than the Courthouse.
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The right form of the question is:
In 1949, Sycamore, Illinois built a hospital for about $500,000. In 1987, the county restored the courthouse for about $1.7 million. The price index for nonresidential construction was 24 in 1949, 108 in 1987, and 126.5 in 2000. According to these numbers, the hospital cost about
a. $2.6 million in 2000 dollars, which is less than the cost of the courthouse restoration in 2000 dollars.
b. $2.6 million in 2000 dollars, which is more than the cost of the courthouse restoration in 2000 dollars.
c. $2.1 million in 2000 dollars, which is more than the cost of the courthouse restoration in 2000 dollars.
d. $2.1 million in 2000 dollars, which is less than the cost of the courthouse restoration in 2000 dollars.
