# unit labor cost growth rate

Cost for a good has increased from $80 to $100 per unit over the previous three years. A person thinks that importing the product from foreign suppliers at a cost of $115.90 per unit may soon be desirable.

A. Calculate the companies unit labor cost growth rate using the constant rate of change model with continuous compounding.

B. Forecast when unit labor costs will equal the current cost of importing.

© BrainMass Inc. brainmass.com October 9, 2019, 7:49 pm ad1c9bdddfhttps://brainmass.com/economics/microeconomics/unit-labor-cost-growth-rate-130619

#### Solution Preview

Part a)

Under continuous compounding, we know that

FV= PV*e^r*t

Where

FV=Future Value

PV=Present Value

e=exponential function

^ means raised to the power of

r=growth rate

t=time

Here we ...

#### Solution Summary

The unit labor cost growth rate is discovered.

$2.19