cumulative inflation factor of five percent per year while Hospital 2 has not applied any inflation factor.

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Assumptions:

Two hospitals report their annual projected revenue for five years to the local newspaper for a story on the area’s future economic outlook. However, Hospital 1 has applied a cumulative inflation factor of five percent per year while Hospital 2 has not applied any inflation factor. Thus the information is not properly comparable.

Revise Hospital 2’s projections by applying a cumulative inflation factor of five percent per year.

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