A company is expected to earn $50,000 a year, at a continuous rate, for 8 years. You

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A company is expected to earn $50,000 a year, at a continuous rate, for 8 years. You can invest the earnings at an interest rate of 7%, compounded continuously. You have the chance to buy the rights to the earnings of the company now for $350,000. Should you buy? Explain.

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Applied Calculus

ISBN: 9781119275565

6th Edition

Authors: Deborah Hughes Hallett, Patti Frazer Lock, Andrew M. Gleason, Daniel E. Flath, Sheldon P. Gordon, David O. Lomen, David Lovelock, William G. McCallum, Brad G. Osgood, Andrew Pasquale

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Question Posted: Apr 12, 2023 04:04 AM

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A company is expected to earn $50,000 a year, at a continuous rate, for 8 years. You

Question:

Step by Step Answer:

We compute the present value of the companys earnings over the next 8 years Using a calcula...View the full answer

Applied Calculus

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