What could the abc company expect to pay for the new truck

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Question

The ABC Company contracted with construction firms to haul debris away from construction sites. The company is in the process of buying a new truck in 2020.

The last truck they purchased was in 2017, and they paid $160,000 for the new Mercedes truck. He asked the firm's accountant to see if there were statistics available that would help him decide on how much he should expect to pay for one this year.

Idris, the accountant, knew of the Machinery and Equipment Subindex of the Producer Price Industrial Commodities from the Bureau of Labor Statistics. He got the following price index information from that organization:

Year

Machinery and Equipment Index

2014 96.3

2015 100.0

2016 109.2

2017 106.0

2018 113.6

2019 111.3

1. Given the above index numbers, what could the ABC Company expect to pay for the new truck of the same type in 2020?

2. Explain in full details on what basis the answer was arrived at.

Reference no: EM132368994

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